Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
Maithan Alloys Limited | Annual report, 2009-10
Maithan Alloys LimitedCorporate Office
P.O. Kalyaneshwari 713369, West Bengal, India
Phone: 91-341-2522 994/5 Fax: 91 341 2521 303
Registered Office
3F East India House, 20 British Indian Street
Kolkata 700 069, India
Predictability > Cyclicality
A
Pr
oduc
t |
info
@tr
isys
com
.com
In our report we have disclosed forward-looking information so that investors can comprehend the
Company’s prospects and make informed investment decisions. This annual report and other written and
oral statements that we make periodically contain such forward-looking statements that set out
anticipated results based on the Management’s plans and assumptions. We have tried, wherever possible,
to qualify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’,
‘plans’, ‘believes’, and words and terms of similar substance in connection with any discussion of future
operating or financial performance.
We do not guarantee that any forward-looking statement will be realised, although we believe we have
been diligent and prudent in our plans and assumptions. The achievement of future results is subject to
risks, uncertainties and validity of inaccurate assumptions. Should known or unknown risks or
uncertainties materialise, or should underlying assumptions prove inaccurate, our actual results could vary
materially from those anticipated, estimated or projected. Investors should bear this in mind as they
consider forward-looking statements. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
Forward-looking statement
Corporate identity 02 Chairman’s overview 04 Managing Director’s review 06 Success
drivers 10 Management discussion and analysis 14 Finance review 17 Risk management 19Directors’ report 20 Report on Corporate Governance 26 Financial section 35 Corporate
information 120
Contents
Maithan Alloys.
Not a usual ferro alloysmanufacturer.
Operates in a manganese alloysspace that is niche and value-added.
Where predictability > cyclicality.
2 Annual Report 2009-10
Milestones 1997Commenced commercialproduction with 10 MVA
Added 7.5 MVA
2000
Maithan Alloys.Beyond commodity.Where we value research,innovation, value-addition,integration, profitabilityand EVA.
Rich 13-year experience in the manufacture and marketing of manganese alloys
Manganese alloy manufacturing capacity of 93 MVA at the Group level; 64 MVA
capacity within the Company
Manufacturing plants located in Kalyaneshwari near Asansol (49 MVA) and
Meghalaya (15 MVA)
Headquartered at Kalyaneshwari near Asansol, West Bengal
Reported an economic value-added of Rs. 23.2 cr for 2009-10
Traded on the Bombay Stock Exchange (BSE) and listed on Kolkata Stock Exchange
3Maithan Alloys Limited
2003
-06
136.
7520
06-0
939
7.78
2009
-10
493.
16
Income fromoperations (Rs. crore)
2003
-06
17.7
920
06-0
939
.52
2009
-10
69.6
2
EBIDTA(Rs. crore)
2003
-06
12.4
920
06-0
912
.43
2009
-10
14.1
2
EBIDTA margin(%)
2003
-06
10.0
720
06-0
919
.66
2009
-10
30.2
4
Post-tax profit(Rs. crore)
2005
-06
0.22
2006
-07
0.58
2007
-08
0.71
2008
-09
0.79
2009
-10
0.56
Debt-equity ratio
2005
-06
43.0
820
06-0
755
.85
2007
-08
94.3
820
08-0
991
.37
2009
-10
120.
77
Book value per share(Rs.)
2005
-06
4.60
2006
-07
11.9
620
07-0
840
.00
2008
-09
0.04
2009
-10
31.1
6
Earnings per share(Rs.)
2005
-06
30,7
7520
06-0
733
,578
2007
-08
55,4
0920
08-0
982
,238
2009
-10
53,4
66
Average realisationsper ton (Rs.)
Added 8.25 MVA Added 24 MVA; nearly doubledcapacity to 49 MVA
Commenced Meghalayaoperations with 15 MVA and
captive power generation
2004 2007 2009
Growingresistance to
cyclicality(on the basis of
a comparison ofblock three-yearaverage results)
Yearlycomparison
4 Annual Report 2009-10
Chairman’s overview
Even as we arerelieved aboutreporting a rebound,we have alreadyembarked onstrengthening ourcompetitiveness.By more than doublingour productioncapacity.
5Maithan Alloys Limited
The global slowdown in 2008-09 had an adverse effect on the
global ferro alloy industry with manufacturers suffering
inventory losses, forex losses and considerable business losses.
We were faced with an alternative: complain about these
realities and wait for things to get better. On the contrary, we
set about rowing harder. The result was a robust post-tax
bottomline of Rs. 30.24 cr for 2009-10 (Rs. 0.14 cr in 2008-
09), surprising our shareowners pleasantly with the scale and
speed of our turnaround.
Our performance of the last two quarters of the financial year
indicate that 2010-11 will be even better.
Industry churnThere were two reasons that contributed to this turnaround.
One, the fundamental robustness of the sub-sector of
manganese alloys, and two, the relative advantage of our
Company within our competitive industry space.
The India advantageWhile most economies the world over floundered through the
economic slowdown, India capitalised on this industry churn
on the back of several realities: abundant manganese ore
deposits, rich know-how (metallurgical and entrepreneurial),
large and growing steel market that emerged quicker from
the slowdown, a favourable geographic positioning that
enabled the Indian alloy industry to cater to the growing
needs of other Asian countries as well as a growing
manufacturing scale that translated into operational
economies.
The result was a rise in India’s manganese alloys export to
demanding markets, re-establishing the country’s position as
a quality-driven, long-term and dependable material provider.
Maithan’s competitive positioningMaithan Alloys recognised emerging opportunities – a
growing manganese alloys market outside Europe, growing
economies like China consuming more manganese alloys, and
a widening Indian market owing to enhanced steel
production.
Anticipating these trends, Maithan Alloys invested its sizeable
surplus in strengthening its competitive position and
emerging as one of the world’s largest manganese alloys
players.
The Company reduced costs through captive power
generation, graduated towards value-added grades and also
embarked on SEZ-centric capacity addition (to be
commissioned by 2011) in a subsidiary company.
Maithan anticipates that with an increasing power deficit, the
country will soon be compelled to restrict the export of
energy-intensive materials; its 72-MVA plant in the
Visakhapatanam SEZ (in a subsidiary company) will insulate it
from the downside of this anticipated action and enable it to
widen its global user base.
Shareholder valueIn 2009-10, Maithan Alloys enriched its product mix, created
new export markets and commenced commercial production
at its Meghalaya plant.
We are optimistic that these initiatives will strengthen our
competitive edge, enhance revenues and profit, and enriche
value in the hands of our shareholders.
B.K. Agarwalla
Chairman
On our performance in 2009-10.Our performance in 2009-10 was clearly better than that inthe previous year despite a low asset utilisation following alower power feed from Damodar Valley Corporation (DVC)and extensive provisions that we made on certain DVC claims(though not expended) that we are confident of recovering.
I must caution shareholders that given the extent of thecollapse in 2008-09, anything achieved in the following yearwill appear as a dramatic improvement. So I would requestshareholders to appraise our performance from theperspective of the four years leading to 2009-10 for a betterunderstanding of our competitive position.
We reported a bottomline of Rs. 11.96 cr in 2006-07,Rs. 39.18 cr in 2007-08, Rs. 0.14 cr in 2008-09 and Rs. 30.24cr in 2009-10. If one smoothens out the exceptionalimprovement in the first half of 2008-09 when we reported aprofit after tax of Rs. 54.18 cr and an exceptional decline inthe second half when we reported a deficit of Rs. 54.04 cr,then one will arrive at a fair understanding of the health ofour business in 2009-10. And based on this understanding,one will be prompted to conclude that we reported a credibleperformance.
On the deficit in 2008-09.Although this does not fall into the purview of ourperformance review for 2009-10, it would be pertinent toexplain the large one-time loss in the third quarter of 2008-09to assure shareholders about the profitability of non-recurrence. The Company reported a surplus ofRs. 54.18 cr in the first half of 2008-09, marked by increasingrealisations of our end products on the one hand and anincreasing dearth of raw materials on the other. At that pointwe could have done two things – kept a lean raw materialinventory while staying in a state of perpetual insecurity orcreated an adequate raw material buffer to protect our
customer delivery schedules. As a responsible organisation weopted for the latter; when the cost of raw materials crashed,we took a rare one-time inventory loss (and accompanyingforex loss) on our books, which was the general industrystandard. On the positive side, we continued to meet ourdelivery schedules and protected our reputation asdependable long-standing partners even in volatile markets.Having said this, it would be important to add that evenduring the challenging days of the slowdown, after removingthe impact of the inventory and forex losses, we remainedoperationally profitable.
On the perceived cyclicality of thebusiness. A number of shareholders have questioned us on ourindustry’s cyclicality. There are three points to consider herewhen it comes to appraising a company like ours.
First, that we operate in a cyclical environment where thedemand for our products is influenced by the health of thesteel industry.
Second, that over the last few years, there has been a shift inour consumer pockets. From an industry that was largelydependent on the western markets, we now see an Asianemergence. Not only is there a shift in global consumptionpatterns, but also a stronger growth emerging from Asia anddeveloping economies, which we can competitively address.
There is a third cycle at play as well. Over the last couple ofyears, we made proactive changes in our business model toenhance our counter-cyclicality and remain relatively insulatedfrom sharp industry swings.
The vigour with which we reported our corporate rebound isindicative of our ability to manage each of these cycles.
On the Company’s response to globalshifts.
6 Annual Report 2009-10
“We rebounded withvigour in 2009-10 becausewe continued to lookbeyond commodity.”
First person
Managing Director S.C. Agarwalla dwells on the highlights of 2009-10
Nearly 50% of Maithan’s exports were made to westerncountries before the slowdown. The moment it becameevident that the shrinking of the western markets was not justa result of the slowdown but part of a longer-termgeographic restructuring, we sought alternative markets. Theurgency with which the Company widened its geographicpresence is indicative of its competitiveness; it addressed thegrowing needs of customers in Asia and the result is that 68%of our exports in 2009-10 were accounted by Asia and only32% by the western markets.
On the Company’s competitive edge.The Company capitalised effectively on the buoyant industryenvironment prior to the slowdown, adjusted with speed toaddress different markets during the slowdown andrebounded with vigour as soon as markets improved. All thesewere the result of the quality of our product mix, an argumentreflected below:
The first point is that we are not a commodity manganesealloy manufacturer; we are a niche player with a value-addedproduct range.
The second point is that we don’t market products togeneric users; we market products to large, quality-respectingand relationship-respecting companies.
The third point is that we don’t manufacture and market;we market, customise and manufacture resulting in a sensitiveunderstanding of the customer’s need, product and business.
The fourth point is that we don’t just have a few products tomarket; we possess a range of niche products that address avariety of customer requirements.
On business-strengthening initiatives in2009-10.Until 2008-09, we purchased all our power requirementseither from the State Electricity Board or the Damodar ValleyCorporation. At the beginning of 2009-10, we commissioneda 15 MW captive thermal power plant in Meghalaya,accounting for 25% of our needs. This Rs. 51-cr power facilitywas funded through accruals and debt. The unit reported aplant load factor in excess of 90%. This ensured continuouspower supply to our Meghalaya unit, which otherwise wouldhave suffered from an acute shortage of grid power.
The proportion of value-added products in our portfolioincreased further in 2009-10. These products were marketedto large, quality-respecting customers, keen to work withlong-term partners, indicating revenue sustainability for us.
On taking the Company ahead.Through our working in 2009-10, we witnessed the
emergence of several market realities.
One, there is a large market for a niche player like us.
Two, the value-added segment catering to the needs ofquality-respecting customers is relatively insulated fromdemand and price swings.
The Company recognised the urgency of responding promptlyto these realities. Consequently, it floated a subsidiary andembarked on commissioning a Rs. 250-cr 72-MVA plant inVisakhapatanam, expected to begin operations from thesecond half of 2011-12.
On how the proposed Visakhapatanamplant will strengthen the business model.The commissioning of the Visakhapatanam plant (in oursubsidiary company) will strengthen our business model forseveral reasons:
The plant will focus on export opportunities.
The plant will be located in a Special Economic Zone withaccompanying tax and duty benefits.
The plant will be proximate to manganese ore pockets,reducing transportation costs.
The plant will be located less than 20 km from the port,facilitating the easy handling of export and import cargo.
The plant enjoys power assurance from the Andhra Pradeshgovernment; Andhra Pradesh will enjoy an increase in poweravailability following the commissioning of various port-basedthermal power plants and the commercialisation of gasreserves from the KG Basin.
On how the Visakhapatanam plant willenhance shareholder value.The Rs. 250-cr plant will be funded through debt andaccruals, without diluting our equity. The plant will becommissioned as a subsidiary to capitalise on tax incentives,resulting in an efficient fiscal structure. The plant is likely togenerate revenues in excess of Rs. 700 cr at full capacity.
On prospects for 2010-11.The current year promises to be better than 2009-10 for anumber of reasons: realisations are higher, Asian demand isrobust and we will not need to provide for DVC claims thatwe did in 2009-10 (but did not expend). A combination ofthese factors will strengthen our topline and bottomline in2010-11.
7Maithan Alloys Limited
8 Annual Report 2009-10
revenue growth in thefour years leading to2009-10
The conventional understanding ofthe manganese alloys sector is that itis cyclical. Maithan Alloys isenhancing a sense of revenues andearnings predictability.
220%
EBIDTA margin,2009-10
The conventional understanding ofthe manganese alloys sector is that itis commodity. Maithan Alloys isaddressing niche pockets requiringvalue-added products.
14.12%
9Maithan Alloys Limited
Return on employedcapital (average),2009-10
The conventional understanding of themanganese alloys sector is that everytransaction is price-driven. MaithanAlloys is proving that longstandingrelationships pay.
24.97%
revenues from exports,2009-10
The conventional understanding ofthe manganese alloys sector is thatit is generic. Maithan Alloys isdemonstrating that customisationworks.
37%
10 Annual Report 2009-10
Successdrivers
Input management IN THE BUSINESS OF MANGANESE ALLOYS MANUFACTURE
AND MARKETING, IT IS IMPERATIVE TO SECURE ONESELF
THROUGH ADEQUATE, CONSISTENT AND COST-EFFECTIVE
INPUT SUPPLY.
Besides, with input costs accounting for 58% of the total
production cost, it is necessary to procure intelligently, cap
input costs and protect viability.
At Maithan, we secured our production with a sustainable
supply of raw material quantity that enabled us to maximise
our production, leading to scale economies. Besides, we
invested in the efficient conversion of this raw material,
reinforcing our viability.
SourcingThe Company’s operations consume manganese ore. The
Company increased the consumption of imported raw
material from 24% of its total needs in 2007-08 to 49% in
2009-10 as domestic availability of high-grade manganese ore
declined. The Company imported a majority of its ore needs
(nearly 50%) from BHP Billiton, the dependable global giant,
from whom the Company has been sourcing for seven years.
Much of the domestically-sourced ore was procured from
Sandur Manganese & Iron Ores Ltd (SMIOL), one of India’s
leading high-grade manganese ore producers.
Quality The Company’s decision to source raw material from leading
players like BHP Billiton and SMIOL ensured high input quality.
Moreover, all raw material consignments were checked
internally in laboratories and issued a quality certificate by a
third party appointed by the Company.
Generally, manganese ores are classified into three grades
according to the manganese content of the ore; high-grade
contains 44-48% Mn, medium grade 35-44% and low grade
25-35%. In India, the reserves of high-grade manganese ore
are limited and a large quantity of high grade ore is imported.
High-grade ores are advantageous compared with low-grade
ores as they generate lower slag and consume less power.
CostsOre prices peaked in 2008-09 as a rise in steel demand
correspondingly catalysed manganese alloy and manganese
ore demand. Since the mining industry was operating at a
high utilisation, an immediate production increase was
difficult, which resulted in higher ore prices and in, turn,
higher finished product (manganese alloy) realisations.
This uptrend continued till the second quarter of 2008-09
when the global slowdown affected steel demand.
Manganese alloy realisations declined followed by a decline in
ore prices. The Company maintained adequate raw material
inventory and booked ore at higher prices. Consequently, as
ore prices declined from Rs. 40,000 a ton to Rs. 21,500 a ton
in just three months leading to December 2008, the Company
incurred inventory losses. In 2009-10, ore prices stabilised.
1
PowerThe Company enjoys a long-term relationship with Damodar
Valley Corporation for the supply of power. The Company’s
Kalyaneshwari plant receives power from a DVC substation
barely 1 km away. The strength of the relationship is reflected
in the following realities:
The power supplied by DVC was marked by consistent
voltage stability.
DVC derives its power from dual sources; hydel and thermal,
resulting in a lower average cost of power generation.
DVC connected Maithan with a dedicated feeder for power
supply accompanied by a vast network of transmission lines
interconnecting tie lines with an adjoining system and power
grid leading to stable, reliable and quality power.
The 15 MVA Meghalaya unit sourced power from a captive
thermal power plant that was commissioned in April, 2009.
The power plant sourced coal from proximate local mines.
Average consumption per ton was 4,534 units for 2009-10
compared with 3,837 units per ton in 2008-09. It must be
noted that value-added products consume a larger quantity of
power but recover the additional cost through higher
realisations.
11Maithan Alloys Limited
Manufacturing 2IN THE COMPLEX BUSINESS OF MANGANESE ALLOYS
MANUFACTURE, IT IS IMPERATIVE TO PRODUCE NICHE
MATERIAL EFFICIENTLY – USING OPTIMAL RESOURCES
WITHOUT COMPROMISING QUALITY – ON THE ONE HAND
AND ENHANCING PRODUCTION ON THE OTHER.
The Company manufactures specialised niche products,
increasing its value-added product basket over the years.
ExpansionThe Company continuously endeavours to increase its
production capacity to meet the ever growing needs of its
existing customers as well as tap unexplored markets.
Consequently the Company possesses a combined capacity of
64 MVA (Kalyaneshwari 49 MVA and Meghalaya 15 MVA)
and is one of the country’s leading manganese alloy
producers.
The Company’s Meghalaya unit enjoys attractive government
incentives in terms of direct and indirect tax, capital subsidy
and transport subsidy. The 15 MVA unit is supported by a
15 MW captive power plant.
The Company embarked on additional capacity creation
through a 72 MVA plant in Visakhapatanam under its
subsidiary company. When commissioned, this plant will
enhance the Group’s overall capacity to 165 MVA, making the
Group one of the fastest growing manganese alloy producers
in the world.
Once operational, the Visakhapatnam plant will cater
exclusively to global demand; the Meghalaya plant will cater
to the domestic market while the Kalyaneshwari plant will
focus on value-added products for the domestic and export
market.
Growing capacity
1997 2008-09 2009-10
Capacity 10 MVA 49 MVA 64 MVA
ReviewThe Kalyaneshwari unit produced 58,275 MT in 2009-10
compared with 69,593 MT in 2008-09; the Meghalaya unit
produced 18,176 MT in 2009-10, its first year of operation.
The decline in output from the Kalyaneshwari plant (Asansol)
was owing to lower power feed from the Damodar Valley
Corporation, the Company’s principal power supplier for 13
years.
Production (in MT)
2007-08 2008-09 2009-10
Kalyaneshwari unit – 49 MVA 65185 69,593 58,275
Meghalaya unit – 15 MVA – – 18,176
Total 65185 69,593 76,451
12 Annual Report 2009-10
Quality 3IN THE DEMANDING BUSINESS OF NICHE MANGANESE
ALLOYS MANUFACTURE, IT IS NECESSARY TO MAINTAIN A
CONSISTENT PROCESS DISCIPLINE LEADING TO HIGH
PRODUCT QUALITY.
Maithan takes pride in its product quality. This is best
showcased by the Company’s demanding clientele comprising
steel giants like SAIL and Jindals in India and reputed buyers in
demanding markets like Japan.
The Company’s product quality is derived from stringent
process controls and the use of quality raw material. The
Company procures supplies from respectable leading
manganese ore producing companies like SMIOL in India and
BHP Billiton internationally. A third party conducts quality
checks on the incoming raw material quality. The Company’s
products are certified in line with ISO 9001, resulting in
process consistency.
Over the years, the Company invested in laboratories
equipped with the latest technologies. The equipment
comprises XRF to reduce human intervention and errors.
Product development4IN THE QUALITY-CENTRIC WORLD OF MANGANESE ALLOYS
MANUFACTURE, IT IS IMPERATIVE TO DEVELOP PRODUCTS
REVOLVING AROUND DIVERSE CUSTOMER NEEDS, TAKING
THE LATTER’S BUSINESS AHEAD.
The addition of manganese alloy to steel strengthens and
hardens it. For instance, researchers found traces of
manganese in Germany’s iron ore, which translated into
superior steel quality. Since then, manganese has been
recognised as critical to steel superiority.
The Company produces ferro manganese and silico
manganese. These products are further graded on the basis of
the presence of manganese, silicon, carbon, phosphorous and
sulphur. There is a minimum specification for manganese and
silicon (desired elements) and the maximum specification for
undesired elements like carbon, phosphorus, sulphur and
others. Value-addition is achieved by increasing the quantity
of desired elements and reducing the presence of undesired
constituents.
Maithan provides a wide product basket. During the year
under review, the Company produced value-added products
with niche applications, reducing its exposure to the volatile
end of the market. Besides, the niche output raised entry
barriers, restricting competition.
13Maithan Alloys Limited
Marketing 5IN THE GLOBALLY DISPERSED MARKET OF MANGANESE
ALLOYS, IT IS NECESSARY TO FIND CUSTOMERS,
UNDERSTAND THEIR NEEDS, CUSTOMISE PRODUCTS AND
DELIVER ON SCHEDULE.
Maithan established its reputation around superior service,
which comprises meeting product specifications, maintaining
the highest quality standards and ensuring timely delivery.
Customer serviceThe Company’s customers primarily comprise traders and steel
manufacturers. As most of the customers are repeat, prudent
servicing is critical.
The Company assumes the role of a partner, working closely
on product customisation that takes the business of its
customers ahead. This resulted in knowledge-sharing and a
deeper market understanding.
The Company also provides superior product quality and
timely delivery. The result of this commitment was that even
in volatile markets, when the Company suffered inventory
losses, supplies to customers remained unaffected. Maithan
produces in line with shipment schedules leading to timely
material delivery.
Geographic reachPrior to the slowdown, the Company focused on
opportunities in the western markets. Once it became evident
that the recovery in western markets would take longer, the
Company shifted its attention to Asia. The share of revenues
generated from the latter increased from 50% prior to the
shift from western markets to nearly 68% in 2009-10. The
speed with which the Company altered its geographic mix
indicates its product excellence, customer focus and pricing
competitiveness.
Shift from western markets to Asia(% of export sales)
2008-09 2009-10
Asia 50 68
Western markets 50 32
The Company continued to cater to major integrated steel
companies like SAIL, JSW, JSPL, JSL and others, the association
with SAIL and JSL being more than 10 years.
Domestic and exports sales (%)
2006-07 2007-08 2008-09 2009-10
Domestic 74.74 54.05 37.73 63.31
Exports 25.26 45.95 62.27 36.69
Indian economic overviewThe Indian economy recovered from the global slowdown of2008 and registered 7.4% GDP growth in 2009-10 (Source:CSO). This in turn strengthened steel demand and production.Crude steel production was 62.84 MT in 2009, an increase of14.05% as compared with the previous year (Source: WorldSteel). This in turn, spurred the demand for raw materials likeferro alloys.
The steel industryGlobal: Global steel production was 1,204 MT in 2009, a7.52% decline over 2008 (Source: Worldsteel). However,China, India and the Middle East registered positive growth insteel production in 2009. China alone produced 566.82 MT ofsteel, 46.6% of world’s total crude steel in 2009 (Source: IISI);BRIC countries produced 58.3% of the total world steelproduction in 2009 (49.6% in 2008). Crude steel productionas a proportion of the global output declined in Brazil to 2.2%in 2009 from 2.5% in 2008, from 5.2% in 2008 in Russia to4.9% in 2009, while in India it rose from 4.2% in 2008 to4.6% in 2009 and in China from 37.7% in 2008 to 46.6% in2009.
2008
2009
(Source – IISI)
Asia: Growth in infrastructure creation catalysed Asian steelconsumption, which now accounts for more than half theworld’s crude steel consumption. Asia’s share of world steelproduction increased from 57% in 2008 to 65% in 2009,producing 782 MT of crude steel (Source: Worldsteel). Thiswas possible due to government stimulus packages andrecovery in emerging Asian economies. In the long run, theconstruction sector is expected to strengthen significantly,especially in China, South Asia and the Middle East, catalysingsteel demand further. In 2009-10, only South Asia, the MiddleEast and China witnessed steel production growth while otherglobal economies reported a decline – 33.9% in NorthAmerica, 22.8% in Europe, 20.1% in South America, 11% inAfrica and 26.3% in Japan (Source: SEAISI). China produced566.8 MT of steel in 2009 – a record annual crude steelproduction for any single country.
India: The Indian iron and steel industry contributes around2% of the gross domestic product of the country. BetweenApril-December 2009 India produced 45.77 MT of steel, a2.7% growth compared with the same period in the previousyear, making it the world’s fifth largest steel producer. Theincrease in production was supported by capacity expansion,mainly in private sector plants and higher utilisation (Source:Economic Survey, 2009). Steel consumption in sectors likemanufacturing, consumer durables, construction andagriculture increased to 40.997 MT in 2009-10 (Source:Ministry of Steel). Crude steel capacity by 2011-12 is expectedto be nearly 124 MT as 222 MoUs have been signed withvarious states for planned capacity of around 276 MT by2020. India’s per capita steel consumption is a mere 47 kg,compared to the world average of 190 kg, indicating a hugegrowth potential (Source: Ministry of Steel).
Ferro alloysFerro alloys are used as alloying elements in steelmanufacture. They are essential additives in steel making,which provide desired properties to the end product. Thesealloys enhance strength, durability, anti-corrosion and anti-stain properties. Ferro alloys constitute less than one percentof the total raw materials required for steel production. Itsprice is positively correlated with steel demand.
14 Annual Report 2009-10
Managementdiscussion and analysis
Japan9.0%
USA6.9% EU27
14.9%
Ukraine2.8%
ROW12.8%
BRIC49.6%
China37.7%
Russia5.2%
India4.2%
Brazil2.5%
South Korea 4.0%
China46.6%
Russia4.9%
ROW11.9%South Korea
4.0%
Ukraine2.4%
Japan7.2%
USA4.8%
BRIC58.3%
EU2711.4%
India4.6%
Brazil2.2%
Following erratic Chinese supply, India stepped up ferro alloysexports. China exported around 9,24,909 tons of ferro-alloy in2009, a 70% decline compared with the preceding year. Thedecline can be attributed to the Chinese central government’sdecision to impose a 20% export duty on ferro alloys.Consequently, a large number of ferro alloy plants wereforced to suspend production; exports of many productsdropped sharply and China became a net ferro alloys importer(Source: Texreport).
Due to increased steel production, the demand formanganese ore and ferro alloys increased. However, with steelproduction projected to increase, a large gap betweenmanganese alloys availability and requirement is foreseen. Therequirement of ferro alloys to cater to the need of projectedsteel production will be 1.90 million tons by 2020 whereasprevailing ferro alloy production in India is 0.75 million tons.(Source: Indian Technomac Co. Ltd.).
Manganese alloysManganese improves steel quality and acts as a deoxidiser.The addition of manganese to steel makes the final producthard and resistant to corrosion and mechanical shock.Manganese improves steel strength, while marginallyimpairing elasticity. A higher content of manganese in thepresence of carbon substantially increases wear resistance.With up to 3% of manganese, the tensile strength of steelsincreases by about 10 kg/mm2 for every added percentage ofmanganese (Source: Acmealloys).
In India, the iron and steel industry is the biggest manganesealloy user, accounting for 90-95% of domestic consumption.
Global manganese alloy production declined around 17% in2009 to 11.6 MT owing to the global recession. Production ofhigh-carbon ferro-manganese (HC FeMn) was 3.8 MT, adecline of 20%; refined ferro-manganese production(RefFeMn) declined 38% to 0.69 MT; silico manganese (SiMn)production at 7 MT reflected a decline of 11%. Silicomanganese fared better than the other two types ofmanganese alloys because of its heavy consumption in longsteel products used in infrastructure and construction projects.Decline in production varied for each alloy due to the types ofsteels these were used in.
Global manganese alloy production
(Source: IMNL)
The global unit consumption of manganese ferro-alloys varieddue to different steel production processes, the quality of rawmaterials used and types of steel products produced. Theoverall average, however, continued to be around 10 kg ofmanganese per MT of steel produced in 2009. Post recession,steel demand is correcting and is expected to correspondinglyincrease manganese alloys consumption (Source: IMnI,Annual Review 2009).
Manganese-intensive steel accounts for 13% of global steelproduction and this proportion is expected to increase. Of thetotal steel produced, multi-purpose low-carbon steels containonly 0.15% to 0.8% manganese compared with high-strengthsteel, which contains over 1% manganese with yield strengthof over 500 MPa. Some grades containing 1-1.5% manganese(as well as chromium or boron) are popular in the automobileindustry. Stainless steel represents less than 2% of total worldsteel production (26-28 MT) and contains about 1%manganese. In special manganese-stainless steels like theseries 200 variety, manganese content ranges between 4 and16% (Source: Stainless-steel-world). High manganese steels,with 13% or more manganese content, like Hadfield steel aretough and wear-resistant; they are used in gyratory crushers,jaw-crusher plates, railway points and crossover componentsand teeth for earth-moving equipment, among others. Highmanganese (10-12%) non-magnetic steels are used in retainerrings for turbo alternators and collars on oil rigs.
15Maithan Alloys Limited
1514
13
12
11
109
8
7 -20%
-15%
-10%
-5%
0%
5%
10%
15%
2005 2006 2007 2008 2009
10.7
-0.9%
Mn Alloy Production (Million MT) % Change y-o-y
10.3%
12.7%
1.5%
-16.5%
11.8 13.3 13.9 11.6
Demand drivers of India’s manganesealloy productionInfrastructure: India’s steel consumption is expected togrow at a CAGR of 8% by 2012 (Source: RNCOS) owing to anincreased government investment in infrastructure. India’s 47kg per capita steel consumption is paltry against 190 kgglobal per capita steel consumption, indicates a scope forcorrection. When this happens, demand for manganese alloyswill increase.
Special steels: There has been a gradual shift in constructionfrom concrete to mild steel to special steels. India’s per capitastainless steel consumption is 1.2 kg whereas the globalaverage per capita consumption is 9.4 kg. Modernconstructions like glass and steel buildings require qualitystainless steel with a high manganese content. An increasingnumber of Indian railway wagons are being made withstainless steel. Around 10 kg of manganese is required toproduce one ton of mild steel whereas 100-150 kg is requiredin one ton of special steel.
Reserves: India is the world’s seventh highest manganese oreproducer. It possesses an estimated reserve of about 240 MTof manganese ore, around 2% of the global reserve (Source:Ministry of Mines). During 2004-05, the ore industry wasworking at 91% capacity utilisation but post recession,capacity utilisation declined to 84% in the quarter endedDecember 2009 (Source: Ministry of Steel). The growth of themanganese alloy industry is directly linked to the growth ofthe country’s steel industry.
Indian manganese ore has a high phosphorus content, fit forthe manufacture of silico-manganese used in constructionsteel, making India a leading exporter. Silico-manganese isused as de-oxidant in steel manufacture, enhancing India’sexport potential.
Steel mix: India, the world's tenth largest stainless steelproducer, churns out 1.8-2 MT, consumes 2.2 MT and exports0.2 MT of stainless steel annually. Stainless steel productionconsumes about 5-6% of the total domestic ferro-manganeseand silico manganese production (105 kg manganese alloysper ton of stainless steel). The economic rebound boostedsteel production, increasing manganese alloys consumption.
Outlook: Manganese alloys production is set to improve,owing to increasing steel demand and consumption.
By 2015-16, India is expected to become the world’s secondlargest crude steel producer.
Domestic consumption of finished steel is estimated at70.34 MT, production of finished steel at 80.23 MT andcapacity at 124 MT by 2011-12.
A total of 222 MoUs were signed with various states for aplanned steel making capacity of around 276 million tons(Source: Ministry of Steels) by 2020.
Indian steelmakers are set to make the most of a boomingglobal demand for steel pipes and tubes with the governmentwithdrawing the 10% duty on the exports of these products(Source: IBEF).
According to ICICI Direct, Indian steel companies are likely toaccount for 19% of the total global demand (Source: IBEF).
With the growing need for oil and gas transportationinfrastructure, a USD 118 billion opportunity is waiting to betapped by steel manufacturers across five years (Source: IBEF).
The Indian manganese alloys edgeThe production of manganese alloys is concentrated in a fewpockets like India, China, South Africa and the CIS. WhileSouth African production is hampered due to logistics, powerand political considerations, China’s – the world’s biggestproducer of manganese alloys – government is discouragingexports by imposing an export duty of 20% owing to thepower-intensive nature of the product. India, on the otherhand, enjoys a number of advantages that make it a globallyfavoured supplier.
Low production cost: India enjoys an abundant availabilityof low cost manpower (skilled and unskilled).
Abundant industrial power: The industrial supply of poweris available at reasonable rates in India, an edge in a power-intensive industry over China and South Africa. China isconserving its energy through an export duty on ferro alloys,while South Africa is experiencing a sustained power crisis.
Favourable location: Three-fourths of India’s landmass isaccessible by sea, enhancing its ability to service global needswhile manganese ore-rich CIS countries are landlocked.
Ore edge: India possesses the seventh largest quantity ofmanganese ore deposits in the world (Source: Ministry ofMines).
16 Annual Report 2009-10
Income accounting methodThe Company’s financial statement was prepared on the basisof conventional historical cost. The Company adopted theGenerally Accepted Accounting Principles and the AccountingStandards as per Section 211(3C) of the Companies Act, 1956.Disclosures were made in accordance with the requirement ofSchedule VI of the Companies Act, 1956 and the IndianAccounting Standards. It followed the mercantile system ofaccounting and recognised income and expenditures on anaccrual basis. The Company made all relevant provisionsapplicable as on 31 March 2010. The absence of any materialqualifications in the Company’s Auditors’ Report indicates thatthe Company’s financials presented a true and fair view duringthe year under review.
Review of 2009-10Total income decreased 24.56% from Rs. 653.72 cr in
2008-09 to Rs. 493.16 cr
EBIDTA increased 220.83% from Rs. 21.70 cr in 2008-09 toRs. 69.62 cr
PAT increased significantly from Rs. 0.15 cr in 2008-09 toRs. 30.25 cr
Cash profit increased from Rs. 6.30 cr in 2008-09 toRs. 46.28 cr
EPS (basic) increased from Rs. 0.04 in 2008-09 to Rs. 31.16
MarginsEBIDTA margin increased from 3.32% in 2008-09 to 14.12%
Net profit margin increased from 0.02% in 2008-09 to 6.13%
Cash profit margin increased from 0.96% in 2008-09 to 9.38%
The Company’s margins increased owing to reduced rawmaterial costs, robust delta and a strong product mix.
Income analysisThe Company’s total income decreased 24.56% fromRs. 653.72 cr in 2009-10 to Rs. 493.16 cr in 2008-09, owingto a decrease in net sales from Rs. 644.13 cr in 2008-09 toRs. 477.99 cr in 2009-10. The decline was largely due to adecline in realisations for the Company’s products. The averagerealisation for 2009-10 was Rs. 53,465.83 per MT ascompared to Rs. 82,238.18 per MT in 2008-09.
Income by source: Other income increased from Rs. 2.05 crin 2008-09 to Rs. 11.88 cr in 2009-10 owing to foreignexchange gains. Other income accounted for 2.54% of thetotal income.
Income by geography: Exports stood at 36.69% of revenuesin 2009-10, compared with 62.27% in 2008-09. During theyear 2009-10, 68% of the Company’s exports were accountedby Asia compared to 32% by the western markets.
Cost analysisThe Company’s total cost decreased 38.91% from Rs. 650.51cr in 2008-09 to Rs. 397.40 cr in 2009-10. Raw-material costwas the major cost component, comprising 46.87% of thetotal cost in 2009-10 (previous year 64.30%).
Raw materials: Raw material expenses decreased significantlyby 55.46% from Rs. 418.25 cr in 2008-09 to Rs. 186.28 cr in2009-10, owing to reduced manganese ore prices. The majorraw material for the Company is manganese ore.
Power and fuel: Power and fuel costs increased 58.74% fromRs. 80.53 cr in 2008-09 to Rs. 127.83 cr in 2009-10, owing toan increase in electricity charges, arrear demand raised by DVCand power generation costs. This cost accounted for 32.17%of the total expenses in 2009-10. Electricity consumption was
17Maithan Alloys Limited
Finance review
Cost component break-up
Segment Amount % of total cost % of total cost(in Rs. cr) in 2009-10 in 2008-09
Raw material 186.28 46.87 64.30
Power and fuel 127.83 32.17 12.38
Manufacturing and other expenses 83.29 20.96 23.32
dependent upon the type of products that the Companymanufactured; higher electricity was consumed formanufacturing value-added products. Electricity consumptionper metric tons of ferro alloys produced increased from anaverage 3,837 units to 4,534 units but was more thanrecovered by the increase in realisations.
Manufacturing expenses: This cost increased from Rs. 9.51cr in 2008-09 to Rs. 12.69 cr in 2009-10, owing to repair andmaintenance expenses incurred towards machinery, stores andpacking materials.
TaxationTotal taxation (including current tax, deferred tax and fringebenefit tax) for 2009-10 increased to Rs. 13.71 cr as againstRs. 0.84 cr in 2008-09. The current tax provided for the yearincreased from Rs. 1.08 cr to Rs. 9.66 cr in 2009-10, owing toan increase in profits. The effective tax rate for the year was21.90%.
Capital employedCapital employed decreased 2.31% from Rs. 233.49 cr in2008-09 to Rs. 228.10 cr in 2009-10 owing to a decline indebt funds. The Company’s return on average capitalemployed stood at 24.97% for 2009-10.
Own funds: Own funds comprised share capital, reserves andsurplus. The Company’s net worth increased 32.18% fromRs. 88.67 cr in 2008-09 to Rs. 117.20 cr in 2009-10, owing toan increase in reserves and surplus (increased from Rs. 78.96 crin 2008-09 to Rs. 107.49 cr in 2009-10). During the yearunder review, equity capital remained unchanged at Rs. 9.71cr. The Company’s equity share comprised 97,11,450 equityshares with a face value of Rs.10.
External funds: External funding decreased 26.66% duringthe year. The Company’s debt (secured and unsecured) stoodat Rs. 104.46 cr as on 31 March 2010 as against Rs.142.43 cras on 31 March 2009. The Company enjoyed a debt-equityratio of 0.56 as on 31 March 2010 compared with 0.79 as on31 March 2009. Interest cost decreased 4.07% from Rs. 14.26cr in 2008-09 to Rs. 13.68 cr in 2009-10. The average cost offunds stood at 11.08% in 2009-10. Interest cover improvedfrom 1.52 in 2008-09 to 5.09 in 2009-10, reflecting theCompany’s growing ability to service debt.
Gross blockThe Company’s gross block increased 94.46% from Rs. 78.28cr in 2008-09 to Rs. 152.22 cr in 2009-10 owing to theaddition of Meghalaya unit. The Company’s depreciationincreased from Rs. 6.45 cr to Rs. 11.98 cr in 2009-10 owing to
an increase in gross block. Accumulated depreciation was28.07% of the gross block, indicating the newness of assets.Return on average net block for 2009-10 stood at 73.42%. The Company’s capital work-in-progress decreased from Rs.72.25 cr in 2008-09 to Rs. 6.39 cr in 2009-10 owing to thecommissioning of its Meghalaya unit.
Working capitalThe Company’s working capital is used for purchasing rawmaterial, managing overheads and customer credit. TheCompany’s working capital decreased 1.37% from Rs. 108.60 cr in 2008-09 to Rs. 107.11 cr in 2009-10.Working capital, as a percentage of capital employed for theyear, stood at 46.96% for the year as compared to 46.51%,the previous year.
Sundry debtors: Debtors increased 53.41% from Rs. 39.62 crin 2008-09 to Rs. 60.78 cr in 2009-10. Debtors exceeding sixmonths stood at Rs. 1.28 cr for the year. The average debtors’cycle increased to 38 days of turnover equivalent in 2009-10(previous year 21 days).
Cash and bank balance: Cash and bank balance increasedfrom Rs. 8.77 cr. in 2008-09 to Rs. 33.20 cr in 2009-10.
Loans and advances: Loans and advances increased 6.06%from Rs. 84.62 cr in 2008-09 to Rs. 89.75 cr in 2009-10.
Current liabilities and provisions: Current liabilities andprovisions increased 31.03% from Rs.102.50 cr in 2008-09 toRs. 134.31 in 2009-10 owing to the increased sundrycreditors, which increased from Rs. 100.97 cr in 2008-09 toRs. 132.19 cr 2009-10.
Forex managementDuring 2009-10, the Company imported basic raw materialworth Rs. 85.14 cr (CIF basis) and incurred Rs. 5.44 cr inforeign currency expenditure. The Company’s exports (FOBvalue) for the year stood at Rs. 173.04 cr as compared toRs. 379.42 cr in 2008-09. The exports of the Company againstimports served as a natural hedge. The Company’s net foreignexchange earnings for the year 2009-10 stood at Rs. 82.46 cr,as compared to Rs. 67.41 cr, the previous year. This wasmainly due to the fact that although exports were high in2008-09 the Company’s raw material imports were also quitehigh (Rs. 308.96 cr) compared to 2009-10.
18 Annual Report 2009-10
19Maithan Alloys Limited
01. Funding riskThe Company’s existing operations do not face any fundingrisks as the Company possesses sufficient internal accruals andworking capital facilities.
02. Funding cost riskThe Company’s attractive gearing of 0.56 as on 31 March2010 will translate into a low funds cost when the Companydecides to mobilise debt.
03. Receivables riskReceivables management is critical to the Company’s successas any stagger could increase debt and debt cost. TheCompany manufactured value-added products, addressedcustomised needs, catered to quality-demanding customersand secured a major part of its sales with upfront payments(Letters of Credit in the case of export). Debtors (expressed indays of turnover equivalent) were 45 days of turnoverequivalent in 2009-10.
04. Geography riskThe Company’s exports to low-growth countries may affectgrowth. As a counter-measure, the Company exported to fast-growing Asian countries. Asian countries accounted for 68%of Company’s exports during 2009-10.
05. Raw material riskThe Company is always exposed to the risk of an inability tobook adequate raw material on the one hand and incurinventory losses should raw material prices crash on the other.The Company worked consistently with the world’s largestmanganese ore supplier for seven years, procuring adequatematerial even in the most challenging times, protecting theCompany’s customer schedules. The Company stocks a rawmaterial inventory equivalent to four months of production.
06. Power riskInterrupted power supply could affect asset utilisation. TheCompany suffered from low asset utilisation owing to adecline in power feed from the Damodar Valley Corporation.To protect its interest, the Company commissioned a captivepower plant (15 MW) in April 2009. It is also investing,(through a subsidiary) Rs. 250 cr in creating a 72 MVA plant
in the Visakhapatanam SEZ, derisking itself from a significantdependence on the Asansol location.
07. Location riskA distance from power, water, ore, rail and port could affectmanganese alloy manufacture. The Company is attractivelyplaced in this regard: power is available from DVC (1 km),water from the river Barakar (4 km), a railway siding is atRadhanagar/ Asansol (15 km), Haldia port is only 300 kmaway and mines (owned by its subsidiary company) 460 km.
08. Capital intensity riskFresh greenfield capital investments are estimated at Rs. 3 crper MVA even as minimum furnace sizes are rising. TheCompany’s furnaces are working at a high utilisation,catalysing returns. The relatively small furnace sizes – average8 MVA are an advantage given the Company’s niche businessmodel, entailing the concurrent production of small volumesfor different customer requirements.
09. Customer riskA decline in steel offtake could affect the manganese alloysmarket. The Company is de-risked for the following reasons:steel accounts for more than 90% of all metals used and itsconsumption is almost 20 times greater than the annualconsumption of all other metals combined. Every dollar offixed asset investment is 14 times as steel-intensive as everydollar of consumption in the US and other developedeconomies (Source: World Steel Dynamics). This helps explainwhy China consumes over three times as much steel as the USdespite China’s economy being less than half that of the US.
10. Environment riskThe manufacture of ferro alloys releases noxious gases. TheCompany invested in emission-managing equipment (electro-stating precipitators and bag filters), processes, practices andperiodic audits. Its operations were declared safe and itsemissions were found well within statutory norms.
11. Volatility riskRealisations and costs could be volatile. The Companyprocures raw material at a certain price and books endproduct sale immediately without affecting its spread.
Risk management
Your Directors have pleasure in submitting the 25th Annual Report on the business and operations, together with the audited
statements of accounts of the Company for the year ended 31 March 2010.
Financial highlightsThe financial performance of the Company, for the year ended 31 March 2010 is summarised below:
Directors' Report
Dear Shareholders,
20 Annual Report 2009-10
(Rs. in lacs)
2009-10 2008-09
Financial results
Sales and other income 49,316 65,372
Gross profit 5,593 744
Less: Depreciation 1,198 645
Profit before tax 4,395 99
Less: Provision for taxation:
For income tax 966 108
For fringe benefit tax – 6
For deferred tax 405 (30)
Profit after taxes 3,024 14
Add: Profit brought forward from previous year 6,621 7,092
Balance available for appropriation 9,645 7,106
Appropriation
Proposed dividend
On equity shares 146 97
On preference shares – 10
Income tax on proposed dividend 25 18
Transfer to General Reserve 200 –
Transfer to Capital Redemption Reserve – 360
Balance retained in Profit & Loss A/c 9,274 6,621
9,645 7,106
Operations and outlookDuring the year under review Company’s total revenue was
Rs. 49316 lacs. Profit before tax has increased from Rs. 99 lacs
in 2008-09 to Rs. 4395 lacs in 2009-10 and Profit after tax
stood at Rs. 3024 lacs in the year 2009-10. The Company
earned a revenue of Rs. 216 lacs from its wind turbine
generators.
The year 2009-10 has seen a turnaround in global economy,
which was severely hit by recession in the previous year. Though
the demand in western markets continued to be sluggish,
demand in Asian markets increased significantly. The Company
was quick to notice this trend and shifted its focus to Asian
markets. The operating performance during the first half of the
year under review was average. However the second half of the
year was excellent due to steady increase in the demand and
prices of manganese alloys. The Company’s profitability also
improved because of commencement of its Meghalaya plant
during the year under review.
The Company anticipates prices of manganese ore and
manganese alloys will remain stable during the year 2010-11.
The Company is expecting better performance during the
current financial year.
New projectThe Company successfully commissioned a manganese alloys
plant backed by a captive power plant at Byrnihat in Mehgalaya
during the year. This enhanced your Company’s manganese
alloys capacity from 49 MVA to 64MVA and Captive Power Plant
capacity from scratch to 15 MW.
Re-classification of authorised sharecapital and issue of bonus shares The Board of Directors at its meeting held on April 28, 2010,
re-classified the Company’s authorised share capital by
converting the redeemable preference share capital portion of
Rs. 5,00,00,000 (Rs. five crore) into equity share capital. Thus,
after re-classification the authorised share capital of the
Company is Rs. 15,00,00,000 (Rs. fifteen crore) divided into
1,50,00,000 (one crore fifty lac) equity shares of Rs. 10 each.
The Board of Directors, at the said meeting, also recommended
issue of bonus equity shares, subject to the approval of the
shareholders, in the proportion of one bonus equity share of
the Company of Rs. 10 each for every two equity shares of the
Company held by the members of the Company and the same
were allotted on 21 June 2010. This resulted in issue of
additional 48,51,925 equity shares of Rs. 10 each and
consequently the paid-up equity share capital of the Company
stand increased to Rs. 14,55,57,750 consisting of 1,45,55,775
equity shares of Rs. 10 each.
The shareholders approval was accorded by passing of
resolution by postal ballot pursuant to the provisions of Section
192A of the Companies Act, 1956 read with the Companies
(passing of the resolution by postal ballot) Rules, 2001 for re-
classification of authorised share capital and issue of bonus
shares, the result of which was announced on 9 June 2010 by
the Chairman Shri B. K. Agarwalla. Both the resolutions were
declared as ‘carried unanimously’.
DividendBased on the Company's performance, the Directors are pleased
to recommend for approval of the Members a Dividend of Re 1
per share (10%) on 1,45,55,775 equity shares of Rs. 10 each of
the Company for the financial year 2009-10. The Dividend on
the equity shares, if declared as above, would involve an outflow
of Rs. 145.55 lacs towards dividend and Rs. 24.74 lacs towards
dividend tax, resulting in a total outflow of Rs. 170.29 lacs.
Public depositsYour Company did not accept any deposits from the public
within the meaning of Section 58A of the Companies Act, 1956
and as such, no amount of principal or interest was outstanding
as on the Balance Sheet date.
Financial review For detailed financial review kindly refer to management
discussion and analysis covered under Corporate Governance
Report which forms part of this Annual Report.
InsuranceThe Company’s assets continue to be adequately insured against
21Maithan Alloys Limited
the risk of fire, riot, earthquake and other risks.
DirectorsSri Shrigopal Jhunjhunwala and Sri Vikash Kumar Jewrajka will
retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. All the
Directors of the Company are in compliance with the provisions
of Section 274(1)(g) of the Companies Act, 1956.
The necessary information in respect of the Directors seeking
reappointment as per Clause 49 of the Listing Agreement is
given in the Notice of the ensuing Annual General Meeting.
Subsidiary companiesParticulars relating to the subsidiary companies as required
under Section 212 of the Companies Act, 1956, are annexed
and form part of this Report.
Consolidated financial statementsIn accordance with the Accounting Standard 21 on
Consolidated Financial Statements read with Accounting
Standard 23 on Accounting for Investments in Associates issued
by the Institute of Chartered Accountants of India, your Directors
have pleasure in attaching the Consolidated Financial
Statements which form part of this Annual Report.
Auditor’s ReportThe Auditor’s Report read along with Notes on Accounts is self-
explanatory and therefore, does not call for any further
comment under Section 217(3) of the Companies Act, 1956.
Statutory auditorsM/s. D K Chhajer & Co., Chartered Accountants, the Auditors of
your Company, retire at the ensuing Annual General Meeting
and being eligible offer themselves for re-appointment. Your
Directors recommend for their re-appointment at the ensuing
Annual General Meeting.
Directors responsibility statementDirectors responsibility statement pursuant to Section 217(2AA)
of the Companies Act, 1956
The Directors hereby confirm:-
i) That in the preparation of the annual accounts for the financial
year ended 31 March 2010, the applicable accounting standards
were followed along with proper explanation relating to
material departures;
ii) That the Directors selected such accounting policies and
applied them consistently and made judgments and estimates
that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for the
year under review;
iii) That the Directors took proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956, for
safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) That the Directors prepared the accounts for the financial
year ended 31 March 2010 on a ‘going concern’ basis.
Corporate GovernancePursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance and a
Certificate from the Auditors of the Company confirming
compliance of conditions of Corporate Governance as
stipulated, form part of the Annual Report.
Management Discussion and Analysis of financial conditions and
results of operations of the Company for the year under review,
as stipulated in Clause 49 of the Listing Agreement with the
stock exchanges, is given as a separate statement in this Annual
Report.
Industrial relations and personnelThe relation between the management and employees is very
cordial and the plant is running smoothly with their cooperation.
The following employees received remuneration of
Rs. 24,00,000 or more per annum (employed thought the year)
or Rs. 200000 per month (employed for part of the year).
22 Annual Report 2009-10
23Maithan Alloys Limited
Cash flow statementThe cash flow statement for the year under reference in terms
of Clause 32 of the Listing Agreement with the stock exchange
is annexed hereto.
Conservation of energy, technologyabsorption and foreign exchange earningand outgoThe statement containing the necessary information as required
under Section 217(1)(e) of the Companies Act, 1956, read with
the Companies (Disclosure of particulars in the Report of Board
of Directors) Rules, 1988 is annexed hereto. This Annexure forms
part of this Report.
AcknowledgmentYour Directors take this opportunity to thank all shareholders,
bankers, suppliers, regulatory and other government authorities
for their assistance, co-operation and the confidence reposed
in your Company. Your Directors also extend their deep sense of
appreciation to the employees of the Company.
For and on behalf of the Board
Kalyaneshawari B. K. Agarwalla
21 June 2010 Chairman
Particulars of Employees in terms of Section 217(2A) of the Companies Act, 1956
Sl. Name Age Qualification and Date of Designation Gross Last employmentNo. (years) experience in years appointment (nature of remuneration held (designation)
duties) (Rs.)
1. Sri B. K. Agarwalla 64 B.Com. 1 April 2006 Chairman and Rs. 135 lacs None
43 years Wholetime Director
(To manage the
overall affairs of
the Company)
2. Sri S. C. Agarwalla 59 B.Com. 1 April 2006 Managing Director Rs. 93 lacs None
40 years (To manage the
affairs of the
Company on day
to day basis)
3. Sri Subodh Agarwalla 32 MBA, B.Tech. 1 July 2006 Wholetime Director Rs. 30 lacs None
9 years (To look after the
Company’s
manufacturing
activities)
Notes:
1. Sri S. C. Agarwalla is father of Sri Subodh Agarwalla.
2. Appointments of all the above employees are contractual.
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the year ended 31 March 2010.
I. Conservation of energy
a) Energy conservation measures taken : Regular study is being conducted on the requirement of
energy conservation measures and steps will be taken, if
any requirement emerges out of the study.
b) Additional investments and proposals, if any, being : None at present.
implemented for reduction of consumption of energy
c) Impact of the measures at (a) & (b) above for reduction : Not applicable
of energy consumption and the consequent impact on
the cost of production of goods
d) Total energy consumption and energy consumption per unit of production is given below:
24 Annual Report 2009-10
Annexure to the Directors’ Report
Form - ADisclosure of particulars with respect to conservation of energy
Part – A
Sl. No. Power and fuel consumption Current year ended Previous year ended
31 March 2010 31 March 2009
1 Electricity
a) Purchased
Unit (lacs KWH) 2,370.61 2,670.50
Total amount (Rs. in lacs) 9,630.02* 8,053.04
Rate/unit (Rs.) 4.06 3.02
b) Own generation
Unit (lacs KWH) 1,095.85 –
Total amount (Rs. in lacs) 3,152.92 –
Rate/unit (Rs.) 2.88 –
2 Coal – –
3 Furnace oil – –
4 Others – –
*Current year’s electricity charges include arrear demand of Rs. 1,209.90 lacs, raised by DVC during the year
25Maithan Alloys Limited
II. Technology absorption Efforts made in technology absorption as per Form ‘B’ of the
Annexure.
Form - B1. Research & Development (R&D)
During 2009-10, the Company did not carry out any R & D
activities.
2. Technology absorption, adaptation and innovation
Efforts, in brief, made towards technology absorption and
innovation and benefits derived as a result thereof.
Capacity utilisation is high, which shows that the Company
properly absorbed and adopted the available technology.
3. Information regarding imported technology
The Company did not import any technology and the plant
operates on indigenous technology.
III. Foreign exchange earnings and outgoa) Despite continuing recession in western Markets during 2009-
10 the Company achieved export sales of Rs. 17,538 lacs. The
same was due to Company’s emphasis on growing Asian
markets. In 2008-09 share of Asian Markets in Company’s
exports was 50% which increased to 68% in 2009-10.
b) The Particulars regarding foreign exchange earnings and
outgo are given in Schedule 23- notes forming part of the
accounts.
By order of the Board,
Kalyaneshawari B. K. Agarwalla
21 June 2010 Chairman
Part – B
Sl. No. Consumption per M.T. of production of ferro alloys Current year ended Previous year ended
31 March 2010 31 March 2009
1 Electricity (units) 4,534* 3,837
2 Furnace oil (ltrs.) – –
3 Coal (M.T.) – –
4 Others – –
*During the current year electricity consumption per MT appears to be high due to change in product mix.
1. Company’s Philosophy on CorporateGovernance Corporate Governance is the combination of voluntary practicesand compliance with laws and regulations leading to effectivecontrol and management of the organisation. Good CorporateGovernance leads to the creation of long term shareholder valueand enhances interest of other stake holders. It brings into focusthe fiduciary and the trusteeship role of the Board to align anddirect the actions of the organisation towards creating wealthand shareholder value.
Your Company’s philosophy is to implement CorporateGovernance practices to achieve excellence in the chosen fieldand to conduct its business in a way which safeguards and addsvalue in the long term for the interest of shareholders,customers, employees, creditors and other stakeholders.Corporate Governance is founded upon a rich legacy of fair andtransparent governance practises which are in the line of the
requirements under Clause 49 of the Listing Agreement withthe stock exchange and will continue to pursue the same tokeep pace with fast changing environment.
2. Composition of Board, DirectorsAttendance record and Directorship heldas on 31 March 2010The Board of Directors of the Company presently comprised ofTen Directors viz. the Four Executive Directors and Six Non-Executive and Independent Directors.
Four (4) meetings of the Board of Directors were held duringthe year 2009-10, on the following dates:
04.06.2009, 30.07.2009, 26.10.2009, 29.01.2010
The Composition of the Board of Directors, attendance record ofthe Directors during the year 2009-10 as well as at the lastAnnual General Meeting are given below.
26 Annual Report 2009-10
Report onCorporate Governance
Sl. Name of the Position No. of Board Attendance No of Directorships No. of Committee#No. Directors meetings during at the last held in other positions in other
the year 2009-10 AGM held public limited public companieson 25 July Companies 2009
Held Attended Chairman Member
1. Sri B.K. Agarwalla Chairman 4 4 Yes 4 1 0(Executive)
2. Sri S.C. Agarwalla Managing Director 4 4 Yes 5 0 0(Executive)
3. Sri Aditya Agarwalla Whole Time 4 2 Yes 3 0 2Director (Executive)
4. Sri Subodh Agarwalla Whole Time 4 4 Yes 2 0 1Director (Executive)
5. Sri M. Satnaliwala Independent 4 4 Yes 1 0 0(Non-executive)
6. Sri Nand Kishore Independent 4 4 No 0 0 0Agarwal (Non-executive)
7. Sri Shrigopal Independent 4 1 Yes 0 0 0Jhunjhunwala (Non-executive)
8. Sri Raj Kumar Independent 4 3 No 0 0 0Agrawal (Non-executive)
9. Sri Vikash Kumar Independent 4 4 No 0 0 0Jewrajka (Non-executive)
10 Sri Biswajit Choudhuri Independent 4 2 No 10 3 3(Non-executive)
# includes the membership /chairmanship only of Audit Committee(s) and Shareholders’/Investors’ Grievances Committee.
None of the Directors is a member of more than 10 Board-levelcommittees, or a chairman of more than five such committees.
Information supplied to the BoardDetailed agenda are circulated along with relevant informationto the Board members to take appropriate decisions and amongothers, this includes:
review of annual operating plans of business and updates,
Capital Budgets and any updates,
quarterly results of the Company,
minutes of meeting of the Audit Committee and othercommittees of the Board,
information on recruitment and remuneration of seniorofficers just below the Board level,
materially important show cause, demand, prosecution andpenalty notices,
fatal or serious accidents or dangerous occurrences,
any materially significant effluent or pollution problems,
any materially relevant default in financial obligations to anyby the Company or substantial non-payment for goods sold bythe Company,
any issue which involves possible public or product liabilityclaims of a substantial nature,
details of any joint venture or collaboration agreement,
transactions that involve substantial payment towardsgoodwill, brand equity or intellectual property,
significant labour problems and their proposed solutions,
significant development in the human resources and industrialrelations fronts,
sale of material nature, of investments, subsidiaries, assets,which is not in the normal course of business,
quarterly details of foreign exchange exposure and the stepstaken by management to limit the risk of adverse exchange ratemovement and
non-compliance of any regulatory or statutory provision orlisting requirements as well as shareholder services such as non-payment of dividend and delays in share transfer.
The Board of Maithan Alloys is regularly presented with allinformation under the above heads whenever applicable andmaterially significant. These are submitted either as part of the
agenda papers well in advance of the Board meeting or aretabled in the course of the Board meetings considering thenature of Agenda.
3. Audit CommitteeThe Board has duly constituted the Audit Committee pursuantto the provisions of Section 292A of the Companies Act, 1956and Clause 49 of the Listing Agreement. The terms of referenceof Audit Committee are as follows:
Overseeing the Company’s financial reporting process anddisclosure of financial information to ensure that the financialstatement is correct, sufficient and credible;
Recommending to the Board the appointment and removalof external auditor, fixation of audit fee and approval forpayment of any other services;
Reviewing with management the annual and/or quarterlyfinancial statements before submission to the Board;
Reviewing with the management and external and internalauditors, the adequacy of internal control systems;
Reviewing the adequacy of internal audit function;
Discussing with internal auditors any significant finding andfollow-up on such issues;
Reviewing the findings of any internal investigations by theinternal auditors in matters where there is suspected fraud orirregularity, or a failure of internal control systems of a materialnature, and then reporting such matter to the Board;
Discussing with external auditors before the audit commenceson the nature and scope of audit, as well as having post-auditdiscussion to ascertain any area of concern;
Approval of appointment of any person heading the financeperson including CFO/ WTD(Finance)
Reviewing the Company’s financial and risk managementpolicies; and
Examining reasons for substantial default in the payment todepositors, shareholders (in case of non payment of declareddividends) and creditors, if any.
Five (5) meetings of the Audit Committee were held during theyear 2009-10, on the following dates :
08.04.2009 04.06. 2009 30.07. 200926.10.2009 29.01.2010
27Maithan Alloys Limited
The constitution of the Committee and the attendance of each member of the Committee is given below :
4. Remuneration CommitteeThe Remuneration Committee reviews and makes
recommendations on annual salaries to be paid to the
Company’s Managing/ Whole Time Directors within the overall
ceiling fixed by the Shareholders.
1(One) meeting of the Remuneration Committee was held
during the year 2009-10, on 4 June 2009.
The composition of the Committee and the attendance of each
member of the Committee is given below :
Details of remuneration paid to Directors for the year ended 31 March 2009 are as follows:
The Company has not issued any stock option during the year
2009-10.
A sitting fee of Rs. 5000/- is being paid to each non-executive
Director of the Company for every meeting of the Board of
Directors attended by them.
5. Investors’ Grievances and ShareTransfer CommitteeThe Board has constituted an “Investors’ Grievances and Share
Transfer Committee”, mainly to look into share transfer and
shareholder/ investor grievances.
Four (4) meetings of the Investors’ Grievances and Share
Transfer Committee were held during the year 2009-10, on the
following dates:
04.06. 2009 30.07. 2009 07.10.2009 29.01.2010
28 Annual Report 2009-10
Name Designation Executive / Non-executive Committee Meetings
/ Independent Attended
Sri M. Satnaliwala Chairman Independent (Non-executive) 5
Sri Nand Kishore Agarwal Member Independent (Non-executive) 5
Sri Raj Kumar Agrawal Member Independent (Non-executive) 4
Name Designation Executive / Non-executive Committee Meetings
/ Independent Attended
Sri Nand Kishore Agarwal Chairman Independent (Non-executive) 1
Sri Shrigopal Jhunjhunwala Member Independent (Non-executive) 1
Sri Raj Kumar Agrawal Member Independent (Non-executive) 1
Sl. No. Name of the Director Remuneration (in Rs.) Commission (in Rs.) Other Benefits (in Rs.)
1. Sri B.K. Agarwalla 90,00,000 45,00,000 Nil
2. Sri S.C. Agarwalla 48,00,000 45,00,000 Nil
3. Sri Aditya Agarwalla 12,00,000 Nil Nil
4. Sri Subodh Agarwalla 30,00,000 Nil Nil
Note:
All the Executive Directors are appointed for a period of 5 years except Sri Subodh Agarwalla, whose tenure is for 4 years 9 months.
All the contracts of appointment can be terminated by giving one month notice by either side.
During the year 2009-10 the Company has received 2 complaints, which were attended. As on 31 March 2010, no grievances were
unaddressed.
6. General Body MeetingsThe location and time of the Annual General Meetings held during the last 3 years are as follows:
29Maithan Alloys Limited
The Composition of the Committee and the attendance record of the Directors during the year 2009-10 is given below:
Annual General For the year Date Time Venue
Meeting
22nd 2007 22 September 2007 2.00 P.M. 3F, East India House, 20 British Indian Street,
Kolkata- 700 069
23rd 2008 6 September 2008 11.00 A.M. “The Conclave” 216 A J C Bose Road,
Kolkata – 700 017
24th 2009 25 July 2009 11.00 A.M. “The Conclave” 216 A J C Bose Road,
Kolkata – 700 017
No Special Resolution was passed through Postal Ballot during
the year 2009-10. None of the Business proposed to be
transacted in the ensuing Annual General Meeting require
passing a Special Resolution through Postal Ballot.
7. Disclosures A. Disclosures on materially significant related party
transactions that may have potential conflict with the
interests of company at large.
Attention of members is drawn to the disclosures of
transaction with the related parties set out in Notes on accounts
no. 12 in the Schedule 22, forming part of the Annual Accounts.
None of the transactions with any of the related parties were
in conflict with the interests of the Company.
The Company enters into related party transactions based on
various business exigencies such as liquidity, profitability and
capital resources of the associates. All related party transactions
Details of Special Resolution passed in Last three Annual General Meetings.
Annual General For the year Special Resolution passed
Meeting
22nd 2007 Appointment and remuneration of Sri Sudhanshu Agarwalla, President of the Company
23rd 2008 Revision in the terms remuneration of Sri Subodh Agarwalla, Whole Time Director
Delisting of Equity shares of the Company from Ahmedabad Stock Exchange Limited.
24th 2009 None
Name Designation Executive / Non-executive Committee Meetings
/ Independent Attended
Sri Raj Kumar Agarwal Chairman Independent 4
Sri S. C. Agarwalla Member Executive 4
Sri Aditya Agarwalla Member Executive 3
are negotiated at arms length and are only intended to promote
the interests of the Company.
B. Details of non-compliance by the Company, penalties,
and strictures imposed on the Company by Stock
Exchange or SEBI or any statutory authority, on any
matter related to capital markets, during the last three
years.
During the last three years, no penalties or strictures have
been imposed on the Company by the Stock Exchange or SEBI
or any other statutory authorities on matters related to capital
markets.
C. Whistle Blower policy and affirmation that no
personnel have been denied access to the audit
committee.
The Company has not framed any Whistle Blower Policy;
however, none of the employees are restrained to approach the
members of Audit Committee.
D. Details of compliance with mandatory requirements
and adoption of the non-mandatory requirements of this
clause.
The Company complies with all the mandatory requirements
and one non-mandatory requirement of Clause 49 of Listing
Agreement viz. constitution of Remuneration committee of
Directors
Compliance by the Company
The CEO and CFO of the Company have certified to the Board
on the prescribed matters as required under Clause 49 of the
Listing Agreement and the said certificate was considered by
the Board at its meeting held on 21 June 2010.
8. Means of CommunicationThe Company intimates un-audited as well as audited financial
results to the Stock Exchanges immediately after these are taken
on record by the Board. These financial results are published in
The Financial Express/the Economic Times (English Edition) &
Dainik Lipi (Bengali edition)’.
Website where financial results are displayed
– www.maithanalloys.in
Whether Company also displayed official news releases
– Not applicable
The presentations made to institutional investors or to the
analysts during the year – None
9. Management Discussion and AnalysisReportPursuant to Clause 49 of the Listing Agreement, a Management
Discussion and Analysis Report is given in a separate section
elsewhere in this report
10. General Shareholder Information
1. Annual General Meeting
- Day, Date, Time and Venue : Wednesday, the 18th of August, 2010 at 11 A.M.
“The Conclave”
216, A J C Bose Road, Kolkata - 700 017
2. Date of Book Closure : From 14 August 2010 to 18 August 2010
(both days inclusive)
3. Dividend payment date : On or before 18 September 2010.
4. Financial year : 1st April to 31st March
5. Financial Calendar for 2009-2010
Board Meetings for consideration : i) 1st/2nd Week of August, 2010 for consideration of unaudited
of financial results financial results for 3 months ending 30 June 2010.
ii) 1st/2nd week of November, 2010 for consideration of Unaudited
financial results for 3 months/half year ending 30 September 2010.
30 Annual Report 2009-10
31Maithan Alloys Limited
: iii) 1st/2nd February, 2011 for consideration of Unaudited financialresults for 3 & 9 months ending 31st December, 2010. iv) April to June, 2011 for consideration of Un-audited/ audited financialresults for the year 2010-2011.
6. Listing of Equity Shares : i) The Calcutta Stock Exchange Ltd.on Stock Exchange 7, Lyons Range, Kolkata-700 001.
The Equity shares of the Company are traded atii)The Bombay Stock Exchange LimitedPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001w.e.f. from 14th May, 2008 under “Permitted Category”
7. Payment of Listing fees : The Listing fees have been paid by the Company
8. ISIN Code : INE683C01011
9. Stock Code : 023915 – The Calcutta Stock Exchange Limited 590078 - Bombay Stock Exchange Limited
10. Share Registrar & Transfer Agent : M/s Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Kolkata-700001
11. Share Transfer System : The Company has appointed M/s Maheshwari Datamatics Pvt. Ltd.(Share Registrar & Transfer Agent) to carry out share transfer for physicalas well as electronic mode. The Company’s shares are traded on stockexchanges in compulsory demat mode. Share transfers, which arereceived in physical form are processed and the Share Certificates arereturned within a period of 14 days from the date of receipt providedthe documents being valid and complete in all respects. Thedematerialised shares are transferred directly to the beneficiaries by thedepositories i.e. National Securities Depository Ltd. and The CentralDepository Services (India) Ltd.
12. Dematerialisation of shares and liquidity: The shares of the Company are in compulsory demat segment and areavailable for trading in the depository systems of both the NationalSecurities Depository Ltd. and The Central Depository Services (India) Ltd.As on 31 March 2010, 84,89,146 Equity Shares of the Company,forming 87.48% of the share capital of the Company, stand dematerialised.
13. Outstanding GDRs/ADRs/Warrants : As at 31 March 2010, the Company had no outstanding GDR’s/ADR’sor any Convertible instruments, /Warrant or any convertible instruments.conversion date and likely impact on equity
14. Address for correspondence : The Company SecretaryMaithan Alloys Limited3F, East India House, 20 British Indian Street, Kolkata – 700 069
15. Investor grievance e-mail id : [email protected]
16. Plant/Works location
Ferro Alloys Division : i) West BengalP.O. Kalyaneshwari-713 369, Dist. Burdwan (W.B.)
ii) MeghalayaA-6, EPIP, Byrnihat, Dist. Ri-Bhoi, Meghalaya – 793101
Wind Mill Division : i) RajasthanPlot No. Vill, Hansuwa, Dist. Jaisalmer , Rajasthan
ii) MaharashtraVill. Ghatnandre (Dhalgaon), Tal. Kawathe Mahankal,Dist. Sangli, Maharashtra
16. Market Price - High/ Low during each : i) The Calcutta Stock Exchange Limited.month in last financial year There was no trading in shares of the Company during the year 2009-10.
ii) Bombay Stock Exchange LimitedThe Trading details at Bombay Stock Exchange is given below:
32 Annual Report 2009-10
Month High Price Low Price No. of Shares
Apr-09 102.20 70.30 1,55,645
May-09 124.00 76.40 2,06,969
Jun-09 130.45 72.85 2,80,805
Jul-09 87.45 66.50 79,785
Aug-09 96.65 72.10 63,442
Sep-09 106.95 90.00 1,09,324
Oct-09 101.55 87.20 87,650
Nov-09 102.00 82.00 70,535
Dec-09 114.70 85.85 1,42,370
Jan-10 123.95 90.00 1,62,580
Feb-10 142.20 102.00 2,51,493
Mar-10 182.20 132.50 2,03,660
Source: www.bseindia.com
250
MAL-High
Am
ou
nt
Period
MONTHLY HIGH & LOW (MAITHAN VS. SENSEX)SE
NSE
X
102
9546
11621
1401713220
1468415357
1580515331
1657815982
1565216438
1779316669
1779017531172901749317143
160021573315600
14931
11492
124
130
8797
107102 102
115
124
142
133
102
908682
8790
7267
737670
182
225
200
175
150
125
100
75
50
Apr-0
9
May
-09
Jun-
09Ju
l-09
Aug-0
9
Sep-
09
Oct-09
Nov-0
9
Dec-0
9
Jan-1
0
Feb-
10
Mar-
10
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
MAL-Low
SENSEX-Low
SENSEX-High
17. Distribution of shareholding as on 31 March 2010
11. Compliance Certificate from the AuditorsCertificate from the Auditors of the Company, M/s D K Chhajer & Co., confirming compliance of the conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement, is annexed herewith.
33Maithan Alloys Limited
By order of the Board,
Kalyaneshawari S. C. Agarwalla
21 June 2010 Managing Director
Kalyaneshawari S. C. Agarwalla
21 June 2010 Managing Director
To the members
Maithan Alloys Limited
In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchange relating to the Corporate
Governance, I confirm that, on the basis of confirmations/ declarations received, all the Directors and Senior Management Personnel
of the Company have complied with the Code of Conduct framed by the Company relevant to financial year ended 31 March 2010.
Declaration by the Managing Directorand CEO
No. of Shares Shareholders Shareholding
Number % of Total Shares % of Total
Upto 500 2117 83.91 252414 2.60
501 - 1,000 125 4.95 106117 1.09
1001 - 2,000 79 3.13 119822 1.23
2,001 - 3,000 79 3.13 199783 2.06
3,001 - 4,000 24 0.95 86005 0.89
4,001 - 5,000 13 0.52 63677 0.66
5,001 - 10,000 10 0.40 68527 0.71
10,001 and above 76 3.01 8807505 90.76
Total 2523 100.00 9703850 100.00
No of shares in Physical mode 214 8.48 1214704 12.52
No of Shares in Demat mode
- NSDL 1399 55.45 8116104 83.64
- CDSL 910 36.07 373042 3.84
Total 2523 100.00 9703850 100.00
34 Annual Report 2009-10
To the members
Maithan Alloys Limited
We have examined the compliance of the conditions of Corporate Governance by Maithan Alloys Limited (the Company) for the year
ended 31 March 2010 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange in India.
The compliance of the conditions of Corporate Governance is the responsibility of the Company’s management. Our examination
was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions
of Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, the Company has complied with
the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We state that in respect of investor grievances received during the year ended 31 March 2010, no investor grievances are pending
for a period exceeding 30 days against the Company as on 31 March 2010 as per the records maintained by the Company and
presented to the Investors’ Grievances and Share Transfer Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
For D.K. Chhajer & Co.
Chartered Accountants
Niraj K Jhunjhunwala
Kalyaneshwari Partner
21 June 2010 M. No. F057170
Auditor’s Certificate on compliance ofconditions of Corporate Governance as stipulated in Clause 49 of The ListingAgreement
Maithan Alloys Limited 35
Auditors’ Report
To
The Members of
MAITHAN ALLOYS LIMITED
1. We have audited the attached Balance Sheet of MAITHAN
ALLOYS LIMITED as at 31 March 2010 and also the Profit
and Loss Account and the Cash Flow statement for the year
ended on that date annexed thereto. These financial
statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor’s Report) Order,
2003 as amended by the Companies (Auditor’s Report)
(Amendment) Order, 2004, issued by the Central
Government of India in terms of Sub-section (4A) of
Section 227 of ‘The Companies Act, 1956’ (the ‘Act) and
on the basis of such checks of the books and records of the
Company as we considered appropriate and according to
the information and explanations given to us, we enclose
in the Annexure a statement on the matters specified in
Paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in
Paragraph 3 above, we report that:
a. We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit ;
b. In our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
c. The Balance Sheet, the Profit and Loss Account and the
Cash Flow statement dealt with by this report are in
agreement with the books of account;
d. In our opinion, the Balance Sheet, the Profit and Loss
Account and the Cash Flow statement dealt with by this
report comply with the accounting standards referred
to in Sub-section (3C) of Section 211 of the Companies
Act, 1956.
e. On the basis of written representations received from
the directors, as on 31 March 2010, and taken on
record by the Board of Directors, we report that none
of the directors is disqualified as on 31 March 2010
from being appointed as a director in terms of Clause
(g) of Sub-section (1) of Section 274 of the Companies
Act, 1956;
f. In our opinion and to the best of our information and
according to the explanations given to us, the said
accounts give the information required by the
Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with the
accounting principles generally accepted in India :
a) in the case of the Balance Sheet, of the state of
affairs of the Company as at 31 March 2010;
b) in the case of the Profit and Loss Account, of the
Profit for the year ended on that date; and
c) in the case of the Cash Flow statement, of the cash
flows for the year ended on that date.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 21 June 2010 M. No- F057170
Firm Reg. No. 304138E
Annual Report 2009-1036
Referred to in paragraph (3) of our report of even date to the members of Maithan Alloys Limited
i) In respect of fixed assets:a) The Company has maintained proper records
showing full particulars including quantitativedetails and situation of its Fixed Assets.
b) All fixed assets were physically verified by themanagement during the year. We have beeninformed that no material discrepancies werenoticed on such physical verification.
c) The Fixed Assets disposed of during the year are notsubstantial and hence, it has not affected the goingconcern status of the Company.
ii) In respect of inventories:a) The management has conducted physical
verification of inventory at reasonable intervalsduring the year.
b) In our opinion, the procedures of physicalverification of inventory followed by themanagement are reasonable and adequate inrelation to the size of the Company and the natureof its business.
c) The Company is maintaining proper records ofinventory and no material discrepancies werenoticed on physical verification.
iii) a) During the year, the Company has not granted anyloans, secured or unsecured to Companies, Firms orother parties covered in the register maintainedunder Section 301 of the Companies Act,1956.Accordingly, the clauses (iii) (b), (iii) (c), (iii) (d)are not applicable.
b) During the year, the Company has taken unsecuredloans from a Company covered in the registermaintained under Section 301 of the CompaniesAct, 1956. The maximum amount involved duringthe year was Rs.10.88 crores and the year endbalance was Rs.10.88 crores.
c) In our opinion and according to the information andexplanation given to us, the rate of interest andother terms and condition of the above loan are notprima facie prejudicial to the interest of theCompany.
d) In respect of aforesaid loan, there is no stipulation asto repayment thereof.
iv) In our opinion and according to the information and
explanations given to us, there is an adequate internalcontrol system commensurate with the size of theCompany and the nature of its business with regard topurchase of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit, nomajor weakness has been noticed in the internal controlsin respect of these areas.
v) In respect of the contracts or arrangements referred to inSection 301 of the Companies Act, 1956:
a) According to the information and explanation givento us by the management, we are of the opinionthat the particulars of contracts or arrangementsreferred to in Section 301 of the Companies Act,1956 have been entered in the register required tobe maintained under that section;
b) In our opinion and according to the information andexplanations given to us, transactions made inpursuance of such contracts or arrangements havebeen made at prices which are reasonable havingregard to the prevailing market prices at the relevanttime where such market prices are available.
vi) In our opinion and according to the information andexplanations given to us, the Company has not accepteddeposits from public hence the provisions of Section 58A,58AA or any other relevant provisions of the CompaniesAct 1956 are not applicable to the Company.
vii) In our opinion and according to the information andexplanations given to us, the Company has an adequateinternal audit system commensurate with the size of theCompany and the nature of its business.
viii) We have been informed that the Central Government hasnot prescribed the maintenance of cost records by theCompany under Section 209 (1) (d) of the Companies Act,1956.
ix) a) According to the records of the Company, theCompany is generally regular in depositingundisputed statutory dues including Provident Fund,Investor Education and Protection Fund, Employees’State Insurance, Income Tax, Sales Tax, Service Tax,Custom Duty, Excise Duty, Cess and other materialstatutory dues applicable to it with the appropriateauthorities.
b) According to the information and explanations givento us, no undisputed amounts payable in respect of
Annexure to the Auditors’ Report
Maithan Alloys Limited 37
income tax, wealth tax, service tax, sales tax, custom duty and excise duty were outstanding, at the year end for a periodof more than six months from the date they became payable.
c) According to the information and explanations given to us, details of dues of sales tax, income tax, custom duty, wealthtax, excise duty, service tax and cess which have not been deposited on account of any dispute are given below:
Particulars Financial years to Forum where Amountwhich the matter pertains dispute is pending (Rs. in lacs)
Excise Duty & Service Tax 2006-07 Joint Commissioner, Bolpur 10.45Excise Duty & Service Tax 2008-09 Joint Commissioner, Bolpur 12.37Excise Duty & Service Tax 2008-09 Assistant Commissioner, Asansol 10.91Excise Duty & Service Tax 2008-09 Commissioner (Appeal), Kolkata 4.98Excise Duty & Service Tax 2009-10 Joint Commissioner, Bolpur 42.85Excise Duty & Service Tax 2009-10 Assistant Commissioner, Asansol 7.85Excise Duty & Service Tax 2009-10 Commissioner (Appeal), Bolpur 141.38
x) The Company has no accumulated losses at the end ofthe financial year and it has not incurred any cash lossesin the current and immediately preceding financial year.
xi) In our opinion and according to information andexplanation given to us, the Company has not defaultedin repayment of dues to a financial institution or bank ordebenture holders.
xii) According to the information and explanations given tous, the Company has not granted loans and advances onthe basis of security by way of pledge of shares,debentures and other securities.
xiii) In our opinion, the Company is not a chit fund or anidhi/mutual benefit society. Therefore, the provisions ofclause 4(xiii) of the Order are not applicable to theCompany.
xiv) The Company has maintained proper records of thetransactions in respect of dealing or trading in shares andtimely entries have been made therein. All shares acquiredby the Company were held in its own name.
xv) According to the information and explanations given tous, the Company has not given any guarantee for loanstaken by others from banks or financial institutions.
xvi) In our opinion and according to the information andexplanation given to us the term loans were applied forthe purpose for which the loans were obtained.
xvii) According to the information and explanations given tous and on the basis of the overall examination of the
balance sheet of the Company, we report that no fundsraised on short-term basis have been used for long-terminvestment.
xviii) According to the information and explanations given tous, the Company has not made any preferential allotmentof shares during the year under review.
xix) In our opinion and according to the information andexplanations given to us, the Company has not issued anysecured debentures during the year. Accordingly, theprovisions of clause 4(xix) of the Order are not applicableto the Company.
xx) During the year, the Company has not made any publicissue and therefore the question of disclosing the end useof money raised by public issue does not arise.
xxi) Based upon the audit procedures performed for thepurpose of reporting the true and fair view of thefinancial statements and as per the information andexplanations given by the management, we report thatno fraud on or by the Company has been noticed orreported during the course of our audit.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 21 June 2010 M. No- F057170
Firm Reg. No. 304138E
Balance Sheet As at 31 March 2010
38 Annual Report 2009-10
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Schedule As at As at
31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders' Fund
Share Capital 1 97,070 97,070
Reserves & Surplus 2 1,074,910 789,572
Loan Funds
Secured Loans 3 824,353 1,424,258
Unsecured Loans 4 220,231 –
Deferred Tax Liability (Net) 5 64,389 23,898
Total 2,280,953 2,334,798
APPLICATION OF FUNDS
Fixed Assets 6
Gross Block 1,522,245 782,786
Less : Depreciation 427,334 307,512
Net Block 1,094,911 475,274
Capital work in progress 7 63,857 722,507
1,158,768 1,197,781
Investments 8 50,994 50,994
Current Assets, Loans & Advances
Inventories 9 576,921 880,821
Sundry Debtors 10 607,820 396,180
Cash and Bank Balances 11 332,028 87,654
Other Current Assets 12 121,905 99,957
Loans & Advances 13 775,604 646,374
2,414,278 2,110,986
Less : Current Liabilities & Provisions 14 1,343,087 1,024,963
Net Current Assets 1,071,191 1,086,023
Total 2,280,953 2,334,798
Significant Accounting Policies & Notes on Accounts 23
Profit and Loss Account For the year ended 31 March 2010
39Maithan Alloys Limited
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Schedule Year ended Year ended
31 March 2010 31 March 2009
INCOME Sales (Gross) 15 4,976,695 6,615,631 Less: Inter Unit Transfer 28,127 –
4,948,568 6,615,631 Less: Excise Duty 168,676 174,329 Net Sales 4,779,892 6,441,302 Export Incentive 32,866 75,532 Other Income 16 118,832 20,386 Increase/(Decrease) in Stock 17 (261,398) 184,857
4,670,192 6,722,077 EXPENDITUREPurchases of Trade Goods 435,683 956,478 Raw Materials Consumed 18 1,862,764 4,182,469 Power & Fuel 19 1,278,295 805,304 Manufacturing Expenses 20 126,916 95,118 Administrative, Selling & Other Expenses 21 270,340 465,715 Interest 22 136,839 142,640 Depreciation 119,842 64,463
4,230,679 6,712,187 Profit before Tax 439,513 9,890 Provision for Taxation : Current Tax 96,631 10,846 Deferred Tax Charge/(Credit) (Net) 40,491 (3,002)Fringe benefit Tax – 641 Profit After Tax 302,391 1,405 Add: Excess/(Short) provision for FBT for earlier years (23) –Add: Balance brought forward from Previous year 662,074 709,234 Amount available for Appropriations 964,442 710,639 APPROPRIATIONS : Transfer to General Reserve 20,000 –Transfer to Capital Redemption Reserve – 36,000 Proposed Dividend : - On Equity Shares 14,555 9,704 - On Preference Shares – 1,036 Corporate Dividend Tax 2,474 1,825 Balance carried to Balance Sheet 927,413 662,074
964,442 710,639 Earnings Per Share (Basic/Diluted) (Rs.) 31.16 0.04 (Face Value Per Share Rs.10/-) Significant Accounting Policies & Notes on Accounts 23
Annual Report 2009-1040
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Year ended Year ended
31 March 2010 31 March 2009
A. CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and extraordinary items 439,513 9,890 Adjustments for : Depreciation 119,842 64,463 Interest (Net of Receipt) 128,820 138,335 Irrecoverable Advances & Debts written off 35,961 – Loss / (Profit) on sale of Investments – (11,282)Loss / (Profit) on sale of Fixed Assets 16 153 Operating profit before Working Capital changes 724,152 201,559 Adjustment for : Trade and other receivables (401,828) (308,643)Inventories 303,900 157,113 Trade and other payables 313,626 132,918 Cash generated from operations 939,850 182,947 Interest Paid (Net of Receipt) (128,257) (139,713)Direct Taxes Received/(Paid) (94,168) (184,079)Cash flow before extraordinary items 717,425 (140,845)Extraordinary items – – Net cash from operating activities (A) 717,425 (140,845)
B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (739,501) (17,369)Sale of Fixed Assets 5 240 Capital Work In progress 658,650 (278,129)Purchase of Investments – (18,000)Sale of Investments – 125,737 Net Cash Used In Investing Activities (B) (80,846) (187,521)
C. CASH FLOW FROM FINANCING ACTIVITIESRedemption of Preference Shares – (36,000)Premium on Redemption – (18,000)Dividend Paid including Tax on Dividend (12,532) (26,847)Proceeds / (Repayment) from / of borrowings (379,674) 436,683 Net cash from financing activities (C) (392,206) 355,836 Net increase/(decrease) in cash and cash Equivalents (A+B+C) 244,374 27,470 Cash and cash equivalents at the beginning of the year 87,654 60,184 Cash and cash equivalents at the end of the year 332,028 87,654
Cash Flow Statement For the year ended 31 March 2010
General ReserveAs per last Account 62,500 62,500 Add: Transferred from Profit &Loss Account 20,000 –
82,500 62,500 Capital Reserve As per last Account 18,998 18,998 Share Premium A/cAs per last Account 10,000 28,000 Less: Premium on Redemption of Preference Shares – 18,000
10,000 10,000 Capital Redemption Reserve 36,000 36,000 Profit & Loss Account 927,412 662,074
1,074,910 789,572
A) Authorised Capital 10,000,000 (PY 1,00,00,000) Equity Shares of Rs. 10/- each 100,000 100,000 5,00,000 (PY 5,00,000) 10% Cumulative Non-convertible Redeemable Preference Shares of Rs. 100/- each 50,000 50,000
150,000 150,000 B) Issued & Subscribed Capital
97,11,450 (PY 97,11,450) Equity Shares of Rs. 10/- each 97,115 97,115 Nil (PY 3,60,000) 10% Cumulative Non-convertible Redeemable Preference Shares of Rs. 100/- each – 36,000 Less: Redeemed during the year – 36,000
– – 97,115 97,115
C) Paid up Capital 97,03,850 (PY 97,03,850) Equity Shares of Rs. 10/- each 97,039 97,039 Add: Forfeited Shares (7600) 31 31
97,070 97,070 Nil (PY 3,60,000) 10% Cumulative Non-convertible Redeemable Preference Shares of Rs. 100/- each – 36,000 Less: Redeemed during the year – 36,000
– – 97,070 97,070
Note : Out of above –
17,91,450 (PY 17,91,450) Equity Shares of Rs.10/- each fully paid up issued for consideration other than cash in pursuance of
Scheme of Amalgamation.
As at As at31 March 2010 31 March 2009
Rs. (in '000)
Maithan Alloys Limited 41
Schedules to the Balance Sheet As at 31 March 2010
Schedule 1 SHARE CAPITAL
Schedule 2 RESERVES & SURPLUS
Annual Report 2009-1042
Term-Loan 434,107 456,735 Working Capital Loan - Rupee Loan 197,409 521,583 - Foreign Currency Loan 192,837 205,940 Short-Term Loan: - Rupee Loan – 240,000
824,353 1,424,258
* Term Loan from Banks are secured against Pari-Passu first charge on all tangible immovable and movable fixed assets of theCompany's units located at Kalyaneshwari and Meghalaya and further secured by second charge on the entire current assets of theCompany, ranking Pari-Passu among the lenders.
* Working Capital Loans are secured against Hypothecation of Inventory, receivables and all other Current Assets, present andfuture of the Company and further secured by second charge on the entire fixed assets of the Company, ranking Pari-Passu amongthe Bankers.
* Short Term Rupee Loan is secured by mortgage of land of a subsidiary Company.
As at As at31 March 2010 31 March 2009
Rs. (in '000)
From Body Corporates 220,231 – 220,231 –
Deferred Tax Liability arising on a/c of Depreciation 64,875 24,241 Less: Deferred Tax Asset arising on retirement benefits 486 343 Net Liability/(Assets) 64,389 23,898
As on Addition during Sale / As on Up to For the Adjustments Up to As on As on
01.04.2009 the year Adjustments 31.03.2010 01.04.2009 Year 31.03.2010 31.03.2010 31.03.2009
Land
1 Freehold Land &
Development 12,241 – – 12,241 – – – – 12,241 12,241
2 Leasehold Land &
Development 3,651 1,461 – 5,112 – – – – 5,112 3,651
Building
3 Non Factory 10,846 1,240 – 12,086 962 475 – 1,437 10,649 9,884
4 Factory 82,084 44,157 – 126,241 21,402 8,804 – 30,206 96,035 60,682
Plant & Machinery
5 Ferro Alloys Division 484,029 224,832 – 708,861 245,440 75,237 – 320,677 388,184 238,589
6 Power Plant Division – 463,934 – 463,934 – 23,879 – 23,879 440,055 –
7 Windmill Division 176,916 – – 176,916 35,866 10,165 – 46,031 130,885 141,050
Other Assets
8 Motor Vehicle 7,879 2,339 42 10,176 2,036 741 20 2,757 7,419 5,843
9 Furniture & Fixture 1,606 786 – 2,392 548 145 – 693 1,699 1,058
10 Office Equipment 1,399 504 – 1,903 358 88 – 446 1,457 1,041
11 Computer 2,135 248 – 2,383 900 308 – 1,208 1,175 1,235
Total 782,786 739,501 42 1,522,245 307,512 119,842 20 427,334 1,094,911 475,274
Previous Year 765,956 17,369 539 782,786 243,195 64,463 146 307,512 475,274 –
Sl. No. PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
Schedules to the Balance Sheet As at 31 March 2010
Schedule 3 SECURED LOAN
Schedule 4 UNSECURED LOAN
Schedule 5 DEFERRED TAX LIABILITY/(ASSET) (NET)
Schedule 6 FIXED ASSETS
Maithan Alloys Limited 43
Kalyaneshwari 63,857 15,076 Meghalaya – 707,431
63,857 722,507
As at As at31 March 2010 31 March 2009
Rs. (in '000)
Long TermIn Subsidiary Company- Unquoted, fully paid up AXL Exploration Pvt. Ltd23,500 (PY 23,500) Equity Shares of Rs. 100/- each . 32,994 32,994 Anjaney Alloys Ltd.10,00,000 (PY 10,00,000) Equity Shares of Rs. 10/- each 10,000 10,000 Anjaney Minerals Ltd.7,99,995 (PY 7,99,995) Equity Shares of Rs.10/- each 8,000 8,000
50,994 50,994
(as taken, valued & certified by the management) Raw Materials 403,263 337,178 Stock-in-Process 9,159 15,075 Finished Goods 68,069 323,598 Scrap and Slag 367 320 Stock in Transit 86,204 200,645 Stores and Packing Materials [includes Stores in Transit Rs.Nil (PY Rs.186,000/-)] 9,859 4,005
576,921 880,821
(unsecured, considered good)Exceeding six months 12,893 9,493 Other Debts 594,927 386,687
607,820 396,180
Cash-in-Hand (as certified by the management) 1,815 1,851 Balance with Banks
In Fixed Deposit Accounts (in lien against margin money) 67,472 57,819 In Current Accounts 198,049 14,997 Debit balance in cash credit accounts 64,662 –
Cheques/Drafts in Hand 30 12,987 332,028 87,654
Schedules to the Balance Sheet As at 31 March 2010
Schedule 7 CAPITAL WORK IN PROGRESS
Schedule 8 INVESTMENTS
Schedule 9 INVENTORIES
Schedule 11 CASH AND BANK BALANCES
Schedule 10 SUNDRY DEBTORS
Annual Report 2009-1044
Schedules to the Balance Sheet As at 31 March 2010
Prepaid Expenses 5,603 11,944 Accrued Interest on Fixed Deposits 1,405 1,968 Balances with Excise Authorities 53,221 86,045 Subsidy Receivable 61,676 –
121,905 99,957
As at As at31 March 2010 31 March 2009
Rs. (in '000)
(Unsecured, considered good) Advances (recoverable in cash or in kind or for value to be received): 68,682 339,954 Advances For Capital Goods 983 – Advances for Raw Materials & Stores 496,359 107,046 Security Deposits 5,631 8,439 I.T. Refundable 94 91 Advance Tax (Net of Provision) 188,355 190,844 Share Application Money 15,500 –
775,604 646,374
Current LiabilitiesSundry Creditors
for Capital Goods 454 17,370 for Raw Materials 878,616 818,485 for Expenses 412,663 150,550 for Others 29,911 23,111
Unpaid Dividend 265 232 1,321,909 1,009,748
Provisions Provision for Leave Encashment/ Gratuity/ Bonus 4,149 2,650 Proposed Dividend 14,555 10,740 Tax on Dividend 2,474 1,825
21,178 15,215 1,343,087 1,024,963
Schedule 12 OTHER CURRENT ASSETS
Schedule 13 LOANS AND ADVANCES
Schedule 14 CURRENT LIABILITIES & PROVISIONS
Ferro Alloys 4,490,694 5,599,181 Scrap, Waste etc 6,658 1,072 Trading Sales 457,742 990,496 Power 21,601 24,882
4,976,695 6,615,631
Year ended Year ended31 March 2010 31 March 2009
Rs. (in '000)
Interest (Gross) (TDS Rs.10,85,980/-, PY Rs.9,63,195/-) 8,019 4,305 Foreign Exchange Fluctuations (Net) 107,791 – Discount on DEPB Licence 680 4,727 Profit on sale of Shares – 11,282 Commission received (TDS - Rs.2,20,600/-, PY Nil) 2,000 – Miscellaneous Receipts 342 72
118,832 20,386
Opening stock 505,585 450,468 Add: Purchases 1,762,259 4,206,162
2,267,844 4,656,630 Less : Inter Unit Transfer 28,127 – Less : Closing stock 376,953 474,161
1,862,764 4,182,469
Electricity charges 932,877 774,773 Electricity duty 36,701 30,531 Power Generation Cost 308,717 –
1,278,295 805,304
Closing StockFinished Goods 68,069 323,598 Work-In-Progress 9,159 15,075 Scrap and Slag 367 320
77,595 338,993 Less: Opening StockFinished Goods 323,598 139,322 Work-In-Progress 15,075 14,063 Scrap and Slag 320 751
338,993 154,136 Increase/(Decrease) in Stock (261,398) 184,857
Maithan Alloys Limited 45
Schedules to the Profit and Loss Account For the year ended 31 March 2010
Schedule 15 SALES (GROSS)
Schedule 16 OTHER INCOME
Schedule 17 INCREASE (DECREASE) IN STOCK
Schedule 18 RAW MATERIAL CONSUMED
Schedule 19 POWER & FUEL
Stores & Packing Materials 66,532 58,716 Carriage Inward 1,929 1,002 Claims & Demurrage 40,214 25,448 Repairs & Maintenance :
to Machinery 10,942 2,508 to Building 2,034 3,256
Packing & Forwarding Expenses 5,265 4,188 126,916 95,118
Year ended Year ended31 March 2010 31 March 2009
Rs. (in '000)
Salary, Wages & Bonus 32,233 21,762 Directors’ Remuneration 27,000 17,629 Director's Sitting Fees 95 45 Contribution to Provident Fund & Other Funds 1,615 1,227 Gratuity 621 594 Lease Rent 599 –Workmen & Staff Welfare 596 648 Rent 413 35 Rates & Taxes 6,604 496 Professional Charges 3,723 4,830 Insurance Premium 4,097 2,290 Bank and other financial charges 14,620 52,297 Auditor’s Remuneration :
As Audit Fees 300 185 As Tax Audit Fees 25 25 Certification and other services 36 34 Reimbursement of Expenses – 19
Repair & Maintenance 1,080 1,143 Carriage Outward 35,099 11,648 Rebate & Discount 11,544 9,232 Irrecoverable Advances and Debts written off 35,961 – Service tax (outward transportation) 725 – Loss on sale of fixed assets 16 153 Brokerage & Commission 13,408 6,225 Foreign Exchange Fluctuation – 182,016 Export Expenses 55,255 121,454 Donation – 3,811 Miscellaneous Expenses 24,675 27,917
270,340 465,715
On Unsecured Loan 16,923 2,131 On Fixed Loan 51,359 37,396 Others 68,557 103,113
136,839 142,640
Schedule 22 INTEREST
Annual Report 2009-1046
Schedules to the Profit and Loss Account For the year ended 31 March 2010
Schedule 20 MANUFACTURING EXPENSES
Schedule 21 ADMINISTRATIVE, SELLING & OTHER EXPENSES
Maithan Alloys Limited 47
1) Significant Accounting Policies a) Nature of Operation
Company is engaged in the business of manufacturing and trading of Ferro Alloys and generation and supply of WindPower.
b) Basis of Accounting The financial statements have been prepared to comply, in all material respects, with accounting standards as notified byCompanies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956.
The financial statements have been prepared under historical cost convention on accrual basis. The accounting policieshave been consistently followed by the Company and are consistent with those used in the previous year except whereotherwise stated.
c) Use of EstimatesThe preparation of financial statements require the management of the Company to make certain estimates andassumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statementsand the reported amount of revenues and expenses during the reporting period. Difference between the actual resultsand estimates are recognised in the period in which the results are known/materialized.
d) Fixed AssetsFixed Assets are stated at cost less Depreciation. The cost of an asset comprises its purchase price net of Cenvat creditplus any directly attributable costs of bringing the asset to the working condition for it’s intended use. Pre -operativeexpenses for major projects are also capitalised, where appropriate.
e) InvestmentsLong term Investments are stated at cost. Provision for diminution in the value of each long term investment is made torecognise a decline, other than that of temporary in nature.
f) Depreciation i) Depreciation on Fixed Assets is provided on Straight Line Method in the manner and the rates specified in Schedule
XIV to the Companies Act; 1956, except on additions made to Building and Plant & Machineries of Ferro Alloys Unitswith effect from 1 April 2006 on which depreciation has been provided on Written Down Value method at the ratespecified in Schedule XIV to the Companies Act,1956.
ii) Fixed Assets costing below Rs. 5,000/- are fully depreciated in the year of acquisition.
iii) Depreciation on Fixed Assets added/deducted during the year is provided on pro-rata basis.
iv) The depreciation charge for the assets which have been impaired, are adjusted to allocate the asset’s revised carryingamount less its residual value, if any, over its remaining useful life.
v) Intangible assets such as softwares, etc. are amortised based upon their estimated useful lives of 5 years.
g) InventoriesInventories are valued at lower of cost or estimated net realisable value. Cost Formula:Raw Materials : At Weighted Average CostWork-in-Process and Finished Goods : At Standard CostTrading Stock and Stock-in-Transit : At Acquisition CostPacking Materials and Stores and Spares : At Weighted Average Cost
Standard Cost of inventories approximates actual cost.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completionand estimated costs necessary to make the sale.
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS
Annual Report 2009-1048
h) Impairmenta. The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is any indication of
impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of anasset exceeds its recoverable amount. The recoverable amount is greater of the asset’s net selling price and value inuse. In assessing value in use, the estimated future cash flows are discounted to their present value at the weightedaverage cost of capital.
b. After Impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
c. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. Howeverthe carrying value after reversal is not increased beyond the carrying value that would have prevailed by chargingusual depreciation if there is no impairment.
i) Excise Duty and Sales TaxExcise Duty is accounted on the basis of both, payments made in respect of goods cleared as also provision made forgoods lying in bonded warehouse. Sales tax paid is charged to profit and loss account.
j) Cenvat CreditCenvat Credit on excise duty paid goods /Fixed Assets is accounted for by reducing the acquisition cost of the relatedgoods / Fixed Assets.
k) Revenue RecognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and therevenue can be easily measured.
i) Sale of Goods:Revenue is recognised when the significant risks and rewards of ownership of goods have passed to the buyer, whichgenerally coincides with delivery. It includes excise duty but excludes value added tax/sales tax. Excise Duty deductedfrom turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount ofliability that arose during the year.
ii) Interest:Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rateapplicable.
iii) Export Benefits:Export Entitlements in the form of Duty Drawback and Duty Entitlement Pass book (DEPB) scheme are recognised inthe Profit and Loss Account when right to receive credit as per the terms of the scheme is established in respect ofexports made and when there is no significant uncertainty regarding the ultimate collection of the relevant exportsproceeds.
l) Foreign Currency transactioni) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount theexchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) ConversionForeign currency monetary items are reported using the closing rate. Non-monetary items which are carried in termsof historical cost denominated in a foreign currency are reported using the exchange rate at the date of thetransaction; and non monetary items which are carried at fair value or other similar valuation denominated in aforeign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange DifferencesForeign currency assets and liabilities as on the Balance Sheet date are revalued in the accounts on the basis of
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 49
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
exchange rates prevailing at the close of the period and exchange loss/gain arising therefrom, is adjusted to the costof fixed assets or charged to the Profit & Loss Account, as the case may be.
iv) Forward Exchange ContractsIn case of transactions covered by forward contracts, the difference between the contract rate and exchange rateprevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account,as the case may be, proportionately over the life of the contract.
m) Government grants and subsidiesGrants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy willbe received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, these are deducted from related expense which it is intended tocompensate. Where the grants or subsidy relates to an asset, its value is deducted in arriving at the carrying amount ofthe related asset.
n) Borrowing Cost Borrowing costs relating to acquisition or construction of fixed assets which takes substantial period of time to get readyfor its intended use are included in the cost of fixed assets to the extent they relate to the period till such assets are readyto be put to use. Other Borrowing costs are recognized as an expense in the year in which they are incurred.
o) Segment Reporting Policiesi) Identification of Segments:
Primary SegmentBusiness Segment:The Company’s operating businesses are organised and managed separately according to the nature of products,with each segment representing a strategic business unit that offers different products and serves different markets.The Identified segments are manufacturing of ferro-alloys and wind power.
Secondary segmentGeographical segment:The analysis of geographical segment is based on the geographical location of customers.
The geographical segments considered for disclosure are as follows:
• Sales within India include sales to customers located within India.
• Sales outside India include sales to customers located outside India.
ii) Allocation of common Costs:Common allocable costs are allocated to each segment according to the relative contribution of each segment to thetotal common costs.
iii) Unallocated Items:The corporate and other segment include general corporate income and expense items, which are not allocated toany business segment.
p) Intangible AssetsResearch and Development Costs:Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forwardwhen its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised overthe period of expected future sales from the related project, not exceeding ten years.
The carrying value of intangible assets is reviewed for impairment annually when the asset is not yet in use, and otherwisewhen events or changes in circumstances indicate that the carrying value may not be recoverable.
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Annual Report 2009-1050
q) TaxationCurrent tax is determined as the amount of tax payable in respect of taxable income for the period based on applicabletax rate and laws.
Deferred tax is recognised subject to consideration of prudence in respect of deferred tax asset on timing differences beingthe difference between taxable income and accounting income that originate in one period and are capable of reversalin one or more subsequent period and is measured using tax rates and laws that have been enacted or substantivelyenacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realization.
r) Provisions, Contingent Liabilities and Contingent AssetsA provision is recognised when there is a present obligation as a result of past event and it is probable that an outflowof resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions arenot discounted to its present value and are determined based on best estimate required to settle the obligation at thebalance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates
s) Earnings Per ShareBasic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders bythe weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning Per Share, the net profit or loss for the period attributable to equityshareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of alldilutive potential equity shares.
t) Cash Flow StatementCash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of anon-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regularrevenue generating, financing and investing activities of the Company are segregated. Cash and cash equivalents in thebalance sheet comprise cash at bank, cash/ cheques in hand and short-term investments with an original maturity of threemonths or less.
u) Employee Benefits
i) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and lossaccount of the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are recognized as an expense in the profit and loss accountfor the year in which the employee has rendered services. The expense is recognized at the present value of theamount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of postemployment and other long term benefits are charged to the profit and loss account
iii) In respect of Employee Stock Option, the excess of fair price on the date of grant, over the exercise price, isrecognized as Deferred Compensation cost and amortised over vesting period.
v) Lease Transaction:Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risks and benefits ofownership of the leased term, are classified as operating leases. Operating lease’s payments are recognized as an expensein the profit & loss Account.
Where the Company is a Lessor: Assets subject to operating leases are included in fixed assets. Lease income is recognizedin the Profit & Loss Account. Cost including depreciation are recognized as an expense in the Profit & Loss Account.
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 51
2) A) Information required by Para 3, 4C and 4D of part (II) of Schedule VI to the Companies Act, 1956 :
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
2009-10 2008-09
a) Licenced Capacity * N.A. N.A.b) Installed Capacity : Unit Qty. Qty.
Ferro Alloys ** MT 115,600 94,600Wind Mill *** MW 3.75 3.75
* Not Applicable in view of changed Industrial Licensing Policy** As certified by the Management, based on interchangeability of products.*** As certified by the Management.
Unit Quantity in MT Value Quantity in MT Value
Opening StockFerro Alloysi) Saleable 5,491 2,62,892 1,880 76,772ii) Unsorted MT 1,355 60,706 1,527 62,550 Total 323,598 139,322 ProductionFerro Alloysi) Saleable 76,451 N.A 69,593 N.Aii) Unsorted MT (1,071) N.A (172) N.APower KWH 6,223,507 – 6,194,913 – SalesFerro Alloys MT 80,837 4,322,018 65,965 5,424,852 Power KWH 6,223,507 21,601 6,194,913 24,882 Scrap Waste, etc – – 6,658 1,072 Less: Inter Unit Transfer – – 28,127 – – Total – – 4,322,150 5,450,806 Captive Consumption – – – 17.629 – Closing Stock :Ferro Alloysi) Saleable 1,105 55,051 5,491 262,892ii) Unsorted – 285 13,018 1,355 60,706 Total 68,069 323,598 Trading Goods:SalesFerro Alloys MT 1,651 107,728 1,653 114,164 Others MT 39,926 350,014 – 876,332 Total 41,577 457,742 1,653 990,496 PurchasesFerro Alloys MT 1,651 111,316 1,653 105,516 Others MT 39,926 324,367 – 850,962 Total 41,577 435,683 1,653 956,478
2009-10 2008-09Rs. (in '000)
Note : i) Quantitative details of slag (waste) is not given as the value of the same is not significant.
ii) Production and Sales excludes 36.00 MT of Ferro Manganese rejected and returned back.
iii) Excise Refund of Rs.49,334,832/- is included in the value of Sales.
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1052
B) Raw Material Consumed
Items Quantity in MT Value Quantity in MT Value
Ores 158,271 1,339,002 175,690 3,567,988 Reductants 64,123 421,122 57,543 438,551 Fluxes 33,492 37,283 9,356 6,886 Others 5,970 65,357 3,194 169,044 Total 261,856 1,862,764 245,783 4,182,469
2009-10 2008-09
C) Value of imported and indigenous raw materials consumed and percentage of each to the total Consumption :
Particulars Percentage Value Percentage Value
Imported 48.77% 908,554 67.85% 2,837,760 Indigenous 51.23% 954,210 32.15% 1,344,709
100% 1,862,764 100% 4,182,469
2009-10 2008-09
Rs. (in '000)
Rs. (in '000)
D) Value of imported and indigenous stores and spare parts consumed and percentage of each to the totalConsumption :
Particulars Percentage Value Percentage Value
Imported NIL NIL NIL NILIndigenous 100% 66,532 100% 58,716
100% 66,532 100% 58,716
2009-10 2008-09
Rs. (in '000)
E) CIF Value of Imports : Rs.851,380 thousand (Previous year Rs.3,089,601 thousand)
F) FOB Value of Exports : Rs.1,730,442 thousand (Previous year Rs.3,794,243 thousand)
G) Expenditure in Foreign Currency : Rs.54,474 thousand (Previous year Rs.30,464 thousand)
2009-10 2008-09
i) Interest and Finance Charges 41,675 18,004 ii) Travelling Expenses 27 800 iii) Demmurage 2,355 5,448 iv) Membership Subscription 2,350 2,372 v) Others 8,068 3,840
Rs. (in '000)
3) Claims against the Company not acknowledged as debts in respect of disputed excise duty & service tax demand- GrossRs.23,078 thousand (Net of Tax Rs.15,234 thousand) (Previous Year- Gross Rs.3,871 thousand, Net of Taxes- Rs.2,555thousand)
4) Contingent Liabilities not provided for in respect of :a) Bills Receivable discounted with Bank
Inland Bills Rs.91,472 thousand (Previous year Rs.59,026 thousand)Foreign Bills Rs.Nil (Previous year Rs. NIL)
b) Letters of Credit issued by Bank and outstanding:Inland LC Rs.49,230 thousand (Previous year Rs. 100,370 thousand)Foreign LC Rs.104,382 thousand (Previous year Rs.753,323 thousand)
c) Bank Guarantees issued by Bank and outstanding: Rs.17,277 thousand (Previous Year Rs.23,776 thousand)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 53
5) Disclosure in respect of Derivative Instruments:a) Derivative instruments outstanding:
b) All the derivative instruments have been acquired for hedging purposes.c) Foreign currency exposures that are not hedged by derivative instruments :
Foreign Currency Contracts Bought/Sold Amount Bought/Sold Amount
USD Sold 9,575.13 – – USD Bought 887.90 Bought 4000JPY-USD Bought 86,126.58 – –
2009-10 2008-09
(in '000)
Net Profit before Taxation 439,512 9,890 Add: Director's Remuneration 27,000 17,629Director's Sitting Fees 95 45Loss on sales of fixed assets 16 153
27,111 17,827Less:Profit on sales of shares – 11,282
27,111 6,545466,624 16,435
Commission @2% 9,332 – Commission restricted to 9,000 –
2009-10 2008-09
Rs. (in '000)
2009-10 2008-09
Debtors USD 4,860 USD 1,159Creditors USD 17,169 USD 14,854
(in '000)
6) Managerial Remuneration under Section 198 of the Companies Act, 1956 :-
7) Expenditure exceeding 1% of revenue included in Miscellaneous Expenses: Nil
8) There are no dues to Micro and Small Enterprises as at 31 March 2010. This information as required to be disclosed underthe Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have beenidentified on the basis of information available with the Company.
9) Profit/Loss on sale of raw materials, if any, stand adjusted in respective consumption account.
2009-10 2008-09
Directors' Remuneration 18,000 17,629 Commission to Whole Time Directors 9,000 –
Computation of Net Profit in accordance with section 349 of the Companies Act, 1956 and the commission payable toDirectors.
Rs. (in '000)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1054
10) Segment ReportingPrimary Segment Information (Business Segments)
Particulars External Inter Segment Total External Inter Segment TotalSales Sales Sales Sales
1. Segment RevenueFerro Alloys 4,758,291 – 4,758,291 6,416,420 – 6,416,420 Wind Power 21,601 – 21,601 24,882 – 24,882 Total Revenue 4,779,892 – 4,779,892 6,441,302 – 6,441,302
2. Segment ResultsFerro Alloys 558,741 – 558,741 122,660 – 122,660 Wind Power 9,536 – 9,536 14,364 – 14,364 Total Segment Results 568,277 568,277 137,024 137,024 Unallocated Income 72 72 Profit before interest & taxation 568,349 137,096 Interest Paid (136,839) (142,640)Interest Income 8,019 4,305 Profit/(Loss) on Sale of Shares – 11,282 Profit/(Loss) on Sale of Fixed Assets (16) (153)Taxation for the year including adjustments of previous year (137,122) (8,485)Profit after Taxation 302,391 1,405
2009-10 2008-09
Rs. (in '000)
Other Information Rs.(in '000)
Particulars Segment Segment Segment SegmentAssets Liabilities Assets Liabilities
Ferro Alloys 3,489,723 1,343,065 3,210,463 1,024,958 Wind Power 134,317 22 149,299 5 Segment Total 3,624,040 1,343,087 3,359,761 1,024,963
2009-10 2008-09
Particulars Capital Depreciation Non cash Capital Depreciation Non cashExpenditure expenditure Expenditure expenditure
other than other thandepreciation depreciation
Ferro Alloys 739,501 109,677 – 17,369 54,299 –
Wind Power – 10,165 – – 10,164 –
Total 739,501 119,842 – 17,369 64,463 –
2009-10 2008-09
Rs. (in '000)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Note :Segment have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account theorganisation structure as well as the differential risks and returns of these segments.
11) As per As-15 “Employee Benefits”, the disclosures of Employee Benefits as defined in the Accounting Standard are givenbelow:
Defined Contribution PlanThe Company provides Provident Fund benefit to all employees.Under the scheme fixed contributions are paid to the regional
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 55
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Provident fund authorities. The Company has no legal or constructive obligation to pay further contributions if the fund doesnot hold sufficient assets to pay employee benefit. The Company has made the following contributions which are recognisedas expense in the profit and loss account for year in which the services are rendered by employees.
2009-10 2008-09
Employer’s Contribution to Provident Fund 1,215 1,123
Rs. (in '000)
Defined Benefit PlanGratuity:
2009-10 2008-09
I. Reconciliation of opening and closing balances of Defined Benefit obligationDefined Benefit obligation at beginning of the year 961 447Acquisition Adjustment – – Interest Cost 77 31Past Service Cost – –Current Service Cost 385 355Curtailment Cost – –Settlement Cost – –Benefit paid – 79Actuarial gain/loss on obligation (42) 208Defined Benefit obligation at year end 1,382 1120
II. Reconciliation of opening and closing balances of fair value of plan assets N.A. N.A. III. Reconciliation of fair value of assets and obligation N.A. N.A. IV. Expense recognised during the year
Current Service Cost 385 355Past Service Cost – – Interest Cost 77 31Expected return on plan assets – – Curtailment Cost – – Settlement Cost – – Actuarial (gain)/loss (42) 208Net Cost 421 594
V. Investment details N.A. N.A. VI. Fair value of Plan Assets N.A. N.A. VII. Expected rate of return on Assets N.A. N.A. VIII. Actual return on Plan Assets N.A. N.A. IX. Actuarial assumption
Mortality Table (LICI) 1994-1996 1994-1996Superannuation age 58 58Early Retirement & Disablement 10 Per 10 Per
Thousand P.A Thousand P.A6 above age 45 6 above age 45
3 between 3 between29 and 45 29 and 45
1 below age 29 1 below age 29Discount rate 8.00% 7.50%Rate of escalation in inflation(per annum) 5.00% 5.00%Return on Assets – – Remaining Working Life 21 21 Formula used Projected Unit Projected Unit
Credit Method Credit Method
Rs. (in '000)
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1056
12 i) Related Partys’ Disclosure:Related Parties :A. Controlling Companies : Nil
B. Subsidiary Companies : 1. AXL Exploration (P) Ltd.2. Anjaney Minerals Ltd.3. Anjaney Alloys Ltd.
C. Associate Companies : 1. Anjaney Ferro Alloys Ltd.2. Maithan Smelters Ltd.3. Maithan Ceramic Ltd.4. Maithan Ispat Ltd.
D. Fellow Companies : 1. Meghalaya Carbide & Chemicals (P) Ltd.
E. Key Management Personnel : 1. Shri Basant Kumar Agarwalla2. Shri Subhas Chandra Agarwalla3. Shri Subodh Agarwalla4. Shri Aditya Agarwalla
F. Relatives of Key Management Personnel : 1. Shri Sudhanshu Agarwalla2. Shri Kaushal Agarwalla
Details of Transactions with related parties during the period under audit are as follows :
Nature of Transactions Associates Subsidiary Fellow Key Management Relatives of KeyPersonnel Management
Personnel
Sale of Goods 442,751 563 – – –864,604 – 48,205 – –
Sale of Shares – – – – – 125,737 – – – –
Purchase of Goods 84,548 – – – –295,835 – 6,703 – –
Purchase of Plant & Machinery – – 2,206 – –– – – – –
Receiving of Services – – – 27,000 4,800– – – 17,629 4,800
Rent Received 60 – – – –60 – – – –
Rent Paid 60 – 180 – –12 – – – –
Interest Paid 9,811 – – – – – – – – –
Rs. (in '000)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation,promotion and otherrelevant factors including supply and demand in the employment market. The above information is certified by the actuary.
The expected rate of return on plan assets is not applicable as the scheme is unfunded.
2009-10 2008-09
X. Effects of changes in the assumed medical Cost N.A. N.A.XI. Valuation record of the last 4 years N.A. N.A.XII. Employer's best estimate N.A. N.A.
Rs. (in '000)
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 57
Details of Transactions with related parties during the period under audit are as follows :
ii) Related party transaction:1. Sale of goods & shares
Detail of sales to Fellow/Associate which are material (more than 10% of total sales to the related parties)
2. Purchase of Goods and Plant & Machinery Detail of purchase from Fellow/Associate which are material (more than 10% of total purchase from the relatedparties)
3. Receiving of servicesDetail of receiving of services from Key Management Personnel and their relatives which are material (more than 10%of total receiving of services from the related parties)
Nature of Transactions Associates Subsidiary Fellow Key Management Relatives of KeyPersonnel Management
Personnel
Commission Received 2,206 – – – –– – – – –
Loan Received 100,000 – – – – – – – – –
Net Loans/ Advances Given – 480 – – –– 2,909 – – –
Investment/ Share Application – (201,500) – – – Given/ (Refunded) – 232,000 – – –
Rs. (in '000)
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
a. Sale of GoodsAnjaney Ferro Alloys Ltd. Associate 393,525 737,451 74,115 146,740Maithan Ispat Ltd. Associate 44,326 30,534 3,742 22,312Maithan Smelters Ltd. Associate 4,900 96,619 4,900 –
b. Sale of SharesMaithan Smelters Ltd. Associate – 125,737 – –
Transaction value Outstanding balance (Dr.)
Rs. (in '000)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
a. Purchase of GoodsAnjaney Ferro Alloys Ltd. Associate 53,835 158,493 – – Maithan Smelters Ltd. Associate 30,128 137,232 – –
b. Purchase of Plant & MachineryMeghalaya Carbide & Chemicals (P) Ltd. Fellow 2,206 – – –
Transaction value Outstanding balance (Dr.)
Rs. (in '000)
Name of the Party 2009-10 2008-09 2009-10 2008-09
Directors' remuneration 27,000 17,629 6,219 – Executive's salary and others 4,800 4,800 – –
Transaction value Outstanding balance
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1058
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
4. Rent receivedDetail of rent received from Fellow/Associate which are material (more than 10% of total rent received from therelated parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 60 60 15 –
Transaction value Outstanding balance
Rs. (in '000)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 9,811 – 8,830 –
Transaction value Outstanding balance
Rs. (in '000)
5. Rent paidDetail of rent paid to Fellow/Associate which are material (more than 10% of total rent paid to the related parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Meghalaya Carbide & Chemicals (P) Ltd. Fellow 180 – – – Maithan Smelters Ltd. Associate 60 12 – –
Transaction value Outstanding balance
Rs. (in '000)
6. Interest paidDetail of interest paid to Fellow/Associate which are material (more than 10% of total interest paid to the relatedparties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Anjaney Ferro Alloys Ltd. Associate 2,206 – – –
Transaction value Outstanding balance
Rs. (in '000)
7. Commission ReceivedDetail of commission received from Fellow/Associate which are material (more than 10% of total commission receivedfrom the related parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 100,000 – 100,000 –
Transaction value Outstanding balance
Rs. (in '000)
8. Loans ReceivedDetail of loan received from Fellow/Associate which are material (more than 10% of total loan received from therelated parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
AXL Exploration (P) Ltd. Subsidiary 480 2,909 3,995 3,514
Transaction value Outstanding balance
Rs. (in '000)
9. Details of Loans/Advances givenDetail of loans/advances given to Subsidiary/Fellow/Associate which are material (more than 10% of totalloans/advances given to the related parties)
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 59
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
14 Deferred Taxation:
13 10% Cumulative Non-Convertible Redeemable Preference Shares have been redeemed as per the terms on 15 July 2008 at 50%Premium.
Particulars Deferred Tax Current Year Deferred Tax(Asset) / Liability Charge / (Credit) (Asset) / Liability
as on 01.04.2009 as on 31.03.2010
Difference between Book & Income Tax Depreciation 24,241 40,633 64,874 Difference of Provision for Retirement Benefits (343) (143) (486)Total 23,898 40,491 64,389
Rs. (in '000)
Rs. (in '000)15 Basic and Diluted Earnings Per Share:
16 Previous year figures have been regrouped and rearranged wherever found necessary.
As at As at31 March 2010 31 March 2009
a) Number of Equity Shares at the beginning of the year 9,703,850 9,703,850 b) Number of Equity Shares at the end of the year 9,703,850 9,703,850 c) Weighted Average number of Equity Shares outstanding during the year 9,703,850 9,703,850 d) Face Value of each Equity Share (Rs.) 10.00 10.00 e) Profit after Tax available for Equity Shareholders (Rs.) 302,391,088 369,743 f) Basic Earning Per Share (Rs.) 31.16 0.04 g) Diluted Earnings per Share (Rs.) 31.16 0.04
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
10. Investment (including Share application Money) given/ (refunded) in SubsidiariesDetail of investment (including Share application Money) given/ (refunded) in Subsidiaries which are material
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Anjaney Alloys Limited Subsidiaries (190,000) 200,000 10,000 200,000Anjaney Minerals Limited Subsidiaries (11,500) 32,000 20,500 32,000
Transaction value Outstanding balance
Rs. (in '000)
Schedule 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Information pursuant to the provisions of Part IV of the Schedule VI to the Companies Act, 1956
Public Issue
Bonus Issue
3 1 0 3
Registration No.
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (Amount in Rs. Thousands)
Total Liabilities
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
2 0 1 0
Date Month Year
Private Placement(Including Shares Premium)
Paid-up Capital
Sources of Funds
Total Assets
Reserves & Surplus
IV. Performance of Company (Amount in Rs. Thousands)
Item Code No. (ITC Code)
V. Generic Names of three Principal Products/Services of Company (as per monetary terms)
Net Fixed Assets Investments
Turnover & Other Incomes
Profit before Tax
Total Expenditure
Application of Funds
2 2 8 0 9 5 3
7 2 0 2 3 0 0 0
Item Code No. (ITC Code) 7 2 0 2 1 1 0 0
Item Code No. (ITC Code)
Product Description Wind Power
Product Description Ferro-Manganese containing by weight more than 2% of carbon
Product Description Ferro-Silico-Manganese
L27101WB1985PLC039503
9 7 0 7 0
4 9 3 1 5 9 0
4 3 9 5 1 3
4 4 9 2 0 7 7
Earning per Share (in Rs.) Dividend Rate3 1 . 1 6 1 0 %
1 1 5 8 7 6 8 5 0 9 9 4
Deferred Tax Assets N I L Net Current Assets 1 0 7 1 1 9 1
Misc. Expenditure N I L
N I L
Rights Issue N I L
State Code 2 1
N I L
N I L
2 2 8 0 9 5 3
1 0 7 4 9 1 0
Deferred Tax Liability Secured Loans6 4 3 8 9
Unsecured Loans 2 2 0 3 2 1
8 2 4 3 5 3
Profit after Tax 3 0 2 3 9 1
Balance Sheet Abstract
Annual Report 2009-1060
Maithan Alloys Limited 61
To
The Board of Directors of
MAITHAN ALLOYS LIMITED
1. We have audited the attached Consolidated Balance Sheet
of MAITHAN ALLOYS LIMITED as at 31 March 2010 and
also the Consolidated Profit and Loss Account and the
Consolidated Cash Flow statement for the year ended on
that date annexed thereto. These financial statements are
the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
3. We have also audited the Financial Statements of the
subsidiaries M/s AXL Exploration Pvt. Ltd., M/s Anjaney
Alloys Ltd. and M/s Anjaney Minerals Ltd. whose financial
statements are considered in the consolidated financial
statements.
4. We report that the Consolidated Financial Statements have
been prepared by the Company’s Management in
accordance with the requirement of Accounting Standard
(AS) 21, “Consolidated Financial Statements” and
Accounting Standard (AS) 23, “Accounting for Investment
in Associate in Consolidated Financial Statements” issued
by the Institute of Chartered Accountants of India and on
the basis of separate audited Financial Statements of
Maithan Alloys Ltd and its subsidiaries included in the
Consolidated Financial Statements.
5. On the basis of the information and explanations given to
us and on consideration of the separate audit report on
individual audited financial statements of Maithan Alloys
Ltd and its aforesaid subsidiaries, we are of the opinion that
the attached consolidated financial statements give a true
and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Consolidated Balance Sheet, of the
state of affairs of Maithan Alloys Ltd and its Subsidiaries
as at 31 March 2010;
b) in the case of Consolidated Profit and Loss Account, of
the profit of Maithan Alloys Ltd and its Subsidiaries for
the year ended on that date; and
c) in the case of Consolidated Cash Flow statement, of the
cash flows of Maithan Alloys Ltd. and its subsidiary for
the year ended on that date.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 21 June 2010 M. No- F057170
Firm Reg. No. 304138E
Consolidated Auditors’ Report
Annual Report 2009-1062
Consolidated Balance Sheet As at 31 March 2010
The Schedules referred to above form an integral part of the Consolidated Balance Sheet.
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Schedule As at As at
31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders' Fund
Share Capital 1 97,070 97,070
Share Application Money 215,000 –
Reserves & Surplus 2 1,066,428 781,953
Loan Funds
Secured Loans 3 824,353 1,424,258
Unsecured Loans 4 306,926 45,318
Minority Interest 2,000 2,000
Deferred Tax Liability (Net) 5 60,179 19,987
2,571,956 2,370,586
APPLICATION OF FUNDS
Fixed Assets 6
Gross Block 1,710,078 1,046,469
Less : Depreciation 428,672 308,657
Net Block 1,281,406 737,812
Capital work in progress 7 118,454 725,098
1,399,860 1,462,910
Current Assets, Loans & Advances
Inventories 8 579,369 883,270
Sundry Debtors 9 607,820 396,180
Cash and Bank Balances 10 372,708 90,255
Other Current Assets 11 121,905 100,584
Loans & Advances 12 834,349 462,111
2,516,151 1,932,400
Less : Current Liabilities & Provisions 13 1,345,565 1,025,174
Net Current Assets 1,170,586 907,226
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preliminary Expenses 360 450
Deferred Revenue Expenses 1,150 –
2,571,956 2,370,586
Consolidated Accounting Policies & Notes on Accounts 22
Maithan Alloys Limited 63
Consolidated Profit and Loss Account For the year ended 31 March 2010
The Schedules referred to above form an integral part of the Consolidated Profit and Loss Account.
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Schedule Year ended Year ended
31 March 2010 31 March 2009
INCOME Sales (Gross) 14 4,976,695 6,615,631 Less: Inter Unit Transfer 28,127 –
4,948,568 6,615,631 Less: Excise Duty 168,676 174,329 Net Sales 4,779,892 6,441,302 Export Incentive 32,866 75,532 Other Income 15 119,637 20,386 Increase/(Decrease) in Stock 16 (261,398) 184,857
4,670,997 6,722,077 EXPENDITURE Purchases 435,683 956,478 Raw Materials Consumed 17 1,862,764 4,182,469 Power & Fuel 18 1,278,295 805,304 Manufacturing Expenses 19 126,916 95,118 Administrative, Selling & Other Expenses 20 272,102 466,068 Interest 21 136,839 142,640 Depreciation 120,035 64,578
4,232,635 6,712,655 Profit before Tax 438,363 9,423 Provision for Taxation :
Current Tax 96,631 10,846 Deferred Tax Charge/(Credit) (Net) 40,193 (3,162)Fringe Benefit Tax – 645
Profit After Tax 301,538 1,093 Add/(Less): Prior Period Item (12) – Add/(Less) : Taxation for earlier year (23) – Add: Balance brought forward from Previous year 654,455 701,927 Amount available for Appropriation 955,959 703,020 APPROPRIATIONS :Transfer to General Reserve 20,000 – Transfer to Capital Redemption Reserve – 36,000 Proposed Dividend :- On Equity Shares 14,555 9,704 - On Preference Shares – 1,036 Tax on Dividend 2,474 1,825 Balance carried to Balance Sheet 918,930 654,455
955,959 703,020 Earnings Per Share (Basic/Diluted) (Rs.) 31.07 0.01 (Face Value Per Share Rs.10/-)Consolidated Accounting Policies & Notes on Accounts 22
Annual Report 2009-1064
Consolidated Cash Flow Statement For the year ended 31 March 2010
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Rs. (in '000) Year ended Year ended
31 March 2010 31 March 2009
A. CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and extraordinary items 438,363 9,423 Adjustments for : Depreciation 120,035 64,578 Interest (Net of Receipt) 128,015 138,335 Deferred Revenue Expenditure (1,150) – Irrecoverable Advances & Debts written off 35,961 – Prior Period Expenses (12) – Miscellaneous expenditure written off 90 – Loss / (Profit) on sale of Shares – (11,282)Loss / (Profit) on sale of fixed assets 16 153 Operating profit before working capital changes 721,319 201,207 Adjustment for : Trade and other receivables (644,101) (128,332)Inventories 303,901 157,113 Trade and other payables 315,894 133,673 Cash generated from operations 697,013 363,661 Interest Paid (Net of Receipt) (127,444) (139,713)Direct Taxes Received/(Paid) (94,284) (184,083)Cash flow before extraordinary items 475,284 39,865 Extraordinary items – –Net Cash From Operating Activities (A) 475,284 39,865
B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (743,799) (257,980)Sale of Fixed Assets 80,153 240 Capital Work In Progress 606,644 (281,170)Sale of Investments – 125,737 Net Cash Used In Investing Activities (B) (57,002) (413,173)
C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Capital (Including Premium) 215,000 2,000 Redemption of Preference Shares incl Premium – (54,000)Dividend Paid including Tax on Dividend (12,532) (26,847)Proceeds / (Repayment) from / of borrowings (338,297) 482,001 Net Cash from Financing Activities (C) (135,829) 403,154 Net Increase/(Decrease) in Cash and Cash equivalents (A+B+C) 282,453 29,845 Cash and Cash equivalents at the beginning of the year 90,255 60,410 Cash and Cash equivalents at the end of the year 394,030 90,255
Schedules to the Consolidated Balance SheetAs at 31 March 2010
General ReserveAs per last Account 62,500 62,500 Add:Transferred from Profit & Loss Account 20,000 –
82,500 62,500 Capital Reserve As per last Account 18,998 18,998 Share Premium A/c As per last Account 10,000 28,000 Less: Premium on Redemption of Preference Shares – 18,000
10,000 10,000 Capital Redemption Reserve 36,000 36,000 Profit & Loss Account 918,930 654,455
1,066,428 781,953
A) Authorised Capital 1,00,00,000 (PY 1,00,00,000) Equity Shares of Rs. 10/- each 100,000 100,000 5,00,000 (PY 5,00,000) 10% Cumulative Non-convertibleRedeemable Preference Shares of Rs. 100/- each 50,000 50,000
150,000 150,000 B) Issued & Subscribed Capital
97,11,450 (PY 97,11,450) Equity Shares of Rs. 10/- each 97,115 97,115 Nil (PY 3,60,000) 10% Cumulative Non-convertibleRedeemable Preference Shares of Rs. 100/- each – 36,000 Less: Redemption – 36,000
– – 97,115 97,115
C) Paid up Capital97,03,850 (PY 97,03,850) Equity Shares of Rs. 10/- each 97,039 97,039 Add: Forfeited Shares (7600 Nos.) 31 31
97,070 97,070 Nil (PY 3,60,000) 10% Cumulative Non-convertible Redeemable Preference Shares of Rs. 100/- each – 36,000 Less: Redemption – 36,000
– – 97,070 97,070
Note : Out of above –
17,91,450 (PY 17,91,450) Equity Shares of Rs. 10/- each fully paid up issued for consideration other than cash in pursuance of
Scheme of Amalgamation.
As at As at31 March 2010 31 March 2009
Rs. (in '000)
Maithan Alloys Limited 65
Schedule 1 SHARE CAPITAL
Schedule 2 RESERVES & SURPLUS
Annual Report 2009-1066
Schedules to the Consolidated Balance SheetAs at 31 March 2010
Term-Loan 434,107 456,735 Working Capital Loans- Rupee Loan 197,409 521,583 - Foreign Currency Loan 192,837 205,940 Short-Term Loan:Rupee Loan – 240,000
824,353 1,424,258
* Term loan from Banks are secured against Pari-Passu first charge on all tangible immovable and movable fixed assets of theCompany's units located at Kalyaneshwari and Meghalaya and further secured by second charge on the entire current assets of theCompany, ranking Pari-Passu among the lenders.
* Working capital loans are secured against Hypothecation of Inventory, receivables and all other Current Assets, present andfuture of the Company and further secured by second charge on the entire fixed assets of the Company, ranking Pari-Passu amongthe Bankers.
* Short Term Rupee Loan is secured by mortgage of land of a subsidiary company.
As at As at31 March 2010 31 March 2009
Rs. (in '000)
Body Corporates 306,926 45,318 306,926 45,318
Deferred Tax Liability arising on a/c of Depreciation 64,875 24,154 Less: Deferred Tax Asset arising on retirement benefits 486 343 Deferred Tax Asset arising on account of Unabsorbed Business Loss (4,210) (3,824)Net Liability/(Assets) 60,179 19,987
As on Addition during Sale / As on Up to For the Adjustments Up to As on As on
01.04.2009 the year Adjustments 31.03.2010 01.04.2009 Year 31.03.2010 31.03.2010 31.03.2009
1 Goodwill on
Consolidation 19,595 – – 19,595 – – – – 19,595 19,595
Land
2 Freehold Land &
Development 14,262 – – 14,262 – – – – 14,262 14,262
3 Leasehold Land &
Development 244,262 1,461 80,148 165,575 – – – – 165,575 244,262
Building
4 Non Factory 10,858 1,240 – 12,098 965 476 – 1,441 10,657 9,893
5 Factory 82,084 44,157 – 126,241 21,402 8,804 – 30,206 96,035 60,682
Plant & Machinery
6 Ferro Alloys Division 484,029 226,379 – 710,408 245,440 75,254 – 320,694 389,714 238,589
7 Mining Division 891 – – 891 725 50 775 116 166
8 Power Plant Division – 463,934 – 463,934 – 23,879 23,879 440,055 –
9 Windmill Division 176,916 – – 176,916 35,866 10,165 – 46,031 130,885 141,050
10 Vehicles 8,387 4,023 42 12,368 2,431 831 20 3,242 9,126 5,955
11 Furniture & Fixtures 1,606 1,430 – 3,036 548 159 – 707 2,329 1,058
12 Office Equipments 1,444 652 – 2,096 380 95 – 475 1,621 1,064
13 Computers 2,135 523 – 2,658 900 322 – 1,222 1,436 1,235
Total 1,046,469 743,799 80,190 1,710,078 308,657 120,035 20 428,672 1281,406 737,812
Previous Year 789,028 257,980 539 1,046,464 244,225 64,578 146 308,657 737,812 –
Sl. No. PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
Schedule 3 SECURED LOAN
Schedule 5 DEFERRED TAX LIABILITY/(ASSET) (NET)
Schedule 6 FIXED ASSETS
Schedule 4 UNSECURED LOAN
Maithan Alloys Limited 67
Schedules to the Consolidated Balance SheetAs at 31 March 2010
Kalyaneshwari 63,857 15,076 Meghalaya – 707,431 Achutapuram 54,597 2,579 Maharashtra – 12
118,454 725,098
As at As at31 March 2010 31 March 2009
Rs. (in '000)
(as taken, valued & certified by the management)Raw Materials 405,711 339,627 Stock-in-Process 9,159 15,075 Finished Goods 68,069 323,598 Scrap and Slag 367 320 Trading Stock 86,204 200,645 Stores and Packing Materials (includes Stores in Transit Rs.Nil (PY Rs.186,000/-)) 9,859 4,005
579,369 883,270
(unsecured, considered good)Exceeding six months 12,893 9,493 Other Debts 594,927 386,687
607,820 396,180
Prepaid Expenses 5,603 12,563 Accrued Interest on Fixed Deposits 1,405 1,976 Balances with Excise Authorities 53,221 86,045 Subsidy Receivable 61,676 –
121,905 100,584
Cash in hand 2,292 2,260 Balance with Scheduled Banks
in Fixed Deposit Accounts (in lien against margin money) 67,472 59,319 in Current Accounts 238,252 15,689
Debit Balance in Cash Credit Account 64,662 – Cheque/Draft in Hand 30 12,987
372,708 90,255
Schedule 7 CAPITAL WORK IN PROGRESS
Schedule 8 INVENTORIES
Schedule 9 SUNDRY DEBTORS
Schedule 10 CASH AND BANK BALANCES
Schedule 11 OTHER CURRENT ASSETS
Schedules to the Consolidated Balance SheetAs at 31 March 2010
(Unsecured, considered good) Advances (recoverable in cash or in kind or for value to be received) 138,418 155,672 Advances for Raw Materials, Stores & Capital Goods 497,343 107,046 Security Deposits 7,029 8,464 I.T. Refundable 94 91 Advance Tax (Net of Provisions) 188,465 190,838 Share Application Money 3,000 –
834,349 462,111
As at As at31 March 2010 31 March 2009
Rs. (in '000)
Schedules to the Consolidated Profit and Loss AccountFor the year ended 31 March 2010
Ferro Alloys 4,490,694 5,599,181 Scrap, Waste etc. 6,658 1,072 Trading Sales 457,742 990,496 Power 21,601 24,882
4,976,695 6,615,631
Year ended Year ended31 March 2010 31 March 2009
Rs. (in '000)
Current LiabilitiesSundry Creditors
for Capital Goods 1,614 17,370 for Raw Materials 878,616 818,485 for Expenses 412,936 150,550 for Others 30,956 23,322
Unpaid Dividend 265 232 1,324,387 1,009,959
Provisions Provision for Leave Encashment/ Gratuity/ Bonus 4,149 2,650 Proposed Dividend 14,555 10,740 Tax on Dividend 2,474 1,825
21,178 15,215 1,345,565 1,025,174
Annual Report 2009-1068
Schedule 12 LOANS AND ADVANCES
Schedule 14 SALES (GROSS)
Schedule 13 CURRENT LIABILITIES & PROVISIONS
Schedules to the Consolidated Profit and Loss AccountFor the year ended 31 March 2010
Interest on Fixed deposit (Gross) (TDS Rs.11,98,190/- PY Rs.9,63,195/-) 8,824 4,305 Foreign Exchange Fluctuations (Net) 107,791 – Discount on DEPB Licence 680 4,727 Profit on sale of Investment – 11,282 Commission received (TDS - Rs.2,20,600/-, PY Nil) 2,000 – Other Receipts 342 72
119,637 20,386
Year ended Year ended31 March 2010 31 March 2009
Rs. (in '000)
Opening stock 505,585 450,468 Add: Purchases 1,762,259 4,206,162
2,267,844 4,656,630 Less : Inter Unit Transfer 28,127 Less : Closing stock 376,953 474,161
1,862,764 4,182,469
Electricity charges 932,877 774,773 Electricity duty 36,701 30,531 Power generation Cost 308,717 –
1,278,295 805,304
Closing StockFinished Goods 68,069 323,598 Work-In-Progress 9,159 15,075 Scrap and Slag 367 320
77,595 338,993 Less: Opening StockFinished Goods 323,598 139,322 Work-In-Progress 15,075 14,063 Scrap and Slag 320 751
338,993 154,136 Increase/(Decrease) in Stock (261,398) 184,857
Stores & Packing Materials 68,169 58,716 Carriage Inward 1,929 1,002 Claims & Demurrage 40,214 25,448 Repairs & Maintenance :
to Machinery 10,942 2,508 to Building 2,034 3,256
Packing & Forwarding Expenses 5,265 4,188 128,553 95,118
Less: Amount Transferred to Capital Work in Progress expenses related to project under construction 1,637 – 126,916 95,118
Maithan Alloys Limited 69
Schedule 15 OTHER INCOME
Schedule 16 INCREASE (DECREASE) IN STOCK
Schedule 17 RAW MATERIAL CONSUMED
Schedule 18 POWER & FUEL
Schedule 19 MANUFACTURING EXPENSES
Annual Report 2009-1070
Schedules to the Consolidated Profit and Loss AccountFor the year ended 31 March 2010
Salary, Wages & Bonus 33,276 21,970 Directors’ Remuneration 27,000 17,629 Directors' Sitting Fees 95 45 Contribution to Provident Fund & Other Funds 1,641 1,253 Gratuity 621 594 Lease Rent 1,218 – Workmen & Staff Welfare 642 648 Rent 804 53 Rates & Taxes 6,604 496 Professional Charges 5,076 4,870 Insurance Premium 4,097 2,290 Bank and other financial charges 14,646 52,299 Auditor’s Remuneration :
As Audit Fees 340 198 As Tax Audit Fees 25 25 Certification & Other Services 36 34 Reimbursement of Expenses – 19
Repair & Maintenance 1,107 1,166 Carriage Outward 35,474 11,648 Rebate & Discount 11,544 9,232 Irrecoverable advances & Debts written off 35,961 – Service tax (outward transportation) 725 – Loss on sale of Fixed Assets 16 153 Brokerage & Commission 13,408 6,225 Foreign Exchange Fluctuation – 182,016 Export Expenses 55,255 121,454 Donation – 3,811 Preliminary & Share Issue Expenses Written Off 90 –Miscellaneous Expenses 26,366 27,941
276,067 466,068 Less: Amount Transferred to Capital Work in Progress expenses related to project under construction 3,965 –
272,102 466,068
Year ended Year ended31 March 2010 31 March 2009
Rs. (in '000)
On Unsecured Loan 23,716 2,131 On Fixed Loan 51,359 37,396 Others 68,557 103,113
143,632 142,640 Less: Amount Transferred to Capital Work in Progress expenses related to project under construction 6,793 –
136,839 142,640
Schedule 20 ADMINISTRATIVE, SELLING & OTHER EXPENSES
Schedule 21 INTEREST
5) Expenditure exceeding 1% of revenue included in Miscellaneous Expenses: Nil
Maithan Alloys Limited 71
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
1) Significant Accounting Policies a) The Consolidated Financial Statement represents consolidation of financial statements of Maithan Alloys Limited (the
Parent Company) with its wholly owned subsidiaries, M/s AXL Exploration (P) Ltd. and M/s Anjaney Alloys Ltd. and partlyowned subsidiary M/s Anjaney Minerals Ltd.
b) Principles of Consolidation The consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS-21) –“Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India. The consolidated FinancialStatements have been prepared on the following basis:
Investment in Subsidiary:The Financial Statements of Maithan Alloys Ltd (“The Parent Company”) and its Subsidiary companies have beencombined on a line by line basis by adding together the book values of like items of assets, liabilities, income andexpenses, after fully eliminating intra company balances and transactions.
The excess of cost to the Parent company of its investment in the subsidiary over the Parent company’s portion of equityof the Subsidiary is recognized in the Financial Statements as Goodwill.
The Financial Statements of the Subsidiaries used in the consolidation are drawn up to the same reporting date as thatof the Parent Company, i.e. year ended 31 March 2010.
The holding of the Parent Company in various subsidiaries are as under:
Investment in Associate:In the case of associates, where the Company directly or indirectly holds more than 20% of equity, investments inassociates are accounted for using Equity Method in accordance with Accounting Standard (AS) 23 – “Accounting forInvestments in associates in consolidated financial statements”.
c) Other Significant Accounting PoliciesThe Significant Accounting Policies, which are generally uniform, are set out in the notes to the accounts in the financialstatements of the Parent Company and its subsidiaries.
2) Claims against the Parent Company not acknowledged as debts in respect of disputed excise duty and service tax demand –Gross Rs. 23,078 thousand (Net of Tax Rs. 15,234 thousand) (Previous Year- Gross Rs. 3,871 thousand, Net of Taxes- Rs. 2,555thousand)
3) Contingent Liabilities not provided for in respect of :a) Bills Receivable discounted with Bank -
Inland Bills Rs.91,472 thousand (Previous year Rs.59,026 thousand)
Foreign Bills Nil (Previous year Nil )
b) Bank guarantee issued by Bank outstanding - Rs.17,277 thousand (Previous year Rs. 23,776 thousand)
c) Letters of Credit issued by Bank and outstanding - Inland LC Rs.49,230 thousand (Previous year Rs.100,370 thousand)
Foreign LC Rs.104,382 thousand (Previous year Rs.753,323 thousand)
4) Managerial Remuneration under Section 198 of the Companies Act, 1956 :-
AXL Exploration (P) Ltd. Anjaney Alloys Ltd. Anjaney Minerals Ltd.
Maithan Alloys Ltd. 100% 100% 79.9995%
2009-10 2008-09
Directors' Remuneration 18,000 17,629 Commission to Whole Time Directors 9,000 –
(Rs. in ‘000)
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS
Annual Report 2009-1072
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
6) There are no dues to Micro and Small Enterprises as at 31 March 2010. This information as required to be disclosed underthe Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have beenidentified on the basis of information available with the Company.
7) a) In compliance with the Accounting Standards – AS 22 relating to “Accounting for Taxes on Income” issued by theInstitute of Chartered Accountants of India, the Parent Company has provided for the net Deferred tax charge arising outof timing difference of depreciation and retirement benefits amounting to Rs.40,491 thousand in the Profit and LossAccount. (Previous year Deferred tax asset of Rs.3,002 thousand)
b) The Subsidiary Company has provided, for the net deferred tax asset arising out of Business Losses and timing differencesof Depreciation, in Profit and Loss account amounting to Rs. 298 thousand (Previous Year Rs. 160 thousand)
c) Deferred Tax Liability(Net):
2009-10 2008-09
Deferred Tax Liability/(Assets) 64,389 23,898(Parent Company) Deferred tax liability/(Asset) (4,210) (3,911)(Subsidiary Company)
60,179 19,987
Rs. (in '000)
8) Segment ReportingPrimary Segment Information (Business Segments)
Particulars External Inter Segment Total External Inter Segment TotalSales Sales Sales Sales
1. Segment RevenueFerro Alloys 4,758,291 – 4,758,291 6,416,420 – 6,416,420Wind Power 21,601 – 21,601 24,882 – 24,882 Mining – Total Revenue 4,779,892 – 4,779,892 6,441,302 – 6,441,302
2. Segment ResultsFerro Alloys 557,651 – 557,651 122,661 – 122,661 Wind Power 9,536 – 9,536 14,364 – 14,364 Mining (864) (864) (469) (469)Total Segment Results 566,323 566,323 136,556 136,556 Unallocated Income 72 72 Profit before interest & taxation 566,394 136,628 Interest Paid (136,839) (142,641)Interest Income 8,824 4,305 Profit/(Loss) on Sale of Shares – 11,282 Profit/(Loss) on Sale of Fixed Assets (16) (153)Taxation for the year including adjustments of previous year (136,824) (8,329)Profit after Taxation 301,538 1,093
2009-10 2008-09
Rs. (in '000)
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 73
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Other Information Rs.(in '000)
Particulars Segment Segment Segment SegmentAssets Liabilities Assets Liabilities
Ferro Alloys 3,776,451 1,345,295 3,210,758 1,022,982 Wind Power 134,317 22 149,299 5 Mining 5,244 248 5,404 3,538 Segment Total 3,916,012 1,345,565 3,365,461 1,026,525
2009-10 2008-09
Particulars Capital Depreciation Non cash Capital Depreciation Non cashExpenditure expenditure Expenditure expenditure
other than other thandepreciation depreciation
Ferro Alloys 743,799 109,788 – 17,369 54,299 –
Wind Power – 10,165 – – 10,164 –
Mining – 83 – – 115 –
Total 743,799 120,035 – 17,369 64,578 –
2009-10 2008-09
Rs. (in '000)
Note :Segment have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account theorganisation structure as well as the differential risks and returns of these segments.
9 i) Related Partys’ Disclosure:Related Parties :A. Controlling Companies : Nil
B. Associate Companies : 1. Anjaney Ferro Alloys Ltd.2. Maithan Smelters Ltd.3. Maithan Ceramic Ltd.4. Maithan Ispat Ltd.
C. Fellow Companies : 1. Meghalaya Carbide & Chemicals (P) Ltd.
D. Key Management Personnel : 1. Shri Basant Kumar Agarwalla2. Shri Subhas Chandra Agarwalla3. Shri Subodh Agarwalla4. Shri Aditya Agarwalla
E. Relatives of Key Management Personnel : 1. Shri Sudhanshu Agarwalla2. Shri Kaushal Agarwalla
Details of Transactions with related parties during the period under audit are as follows :
Nature of Transactions Associates Fellow Key Management Relatives of KeyPersonnel Management
Personnel
Sale of Goods 442,751 – – –864,604 48,205 – –
Sale of Shares – – – –125,737 – – –
Purchase of Goods 84,548 – – –295,835 6,703 – –
Rs. (in '000)
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1074
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
Details of Transactions with related parties during the period under audit are as follows :
Nature of Transactions Associates Fellow Key Management Relatives of KeyPersonnel Management
Personnel
Purchase of Plant & Machinery – 2,206 – –– – – –
Receiving of Services – – 27,000 4,800 – – 17,629 4,800
Rent Received 60 – – –60 – – –
Rent Paid 60 180 – –12 – – –
Interest Paid 9,811 – – –– – – –
Commission Received 2,206 – – –– – – –
Loan Received 100,000 – – –– – – –
Rs. (in '000)
ii) Related party transaction:1. Sale of goods & shares
Detail of sales to Fellow/Associate which are material (more than 10% of total sales to the related parties)
2. Purchase of Goods and Plant & Machinery Detail of purchase from Fellow/Associate which are material (more than 10% of total purchase from the relatedparties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
a. Sale of GoodsAnjaney Ferro Alloys Ltd. Associate 393,525 737,451 74,115 146,740 Maithan Ispat Ltd. Associate 44,326 30,534 3,742 22,312 Maithan Smelters Ltd. Associate 4,900 96,619 4,900 –
b. Sale of SharesMaithan Smelters Ltd. Associate – 125,737 – –
Transaction value Outstanding balance (Dr.)
Rs. (in '000)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
a. Purchase of GoodsAnjaney Ferro Alloys Ltd. Associate 53,835 158,493 – –
Maithan Smelters Ltd. Associate 30,128 137,232 – – b. Purchase of Plant & Machinery
Meghalaya Carbide & Chemicals (P) Ltd. Fellow 2,206 – – –
Transaction value Outstanding balance (Dr.)
Rs. (in '000)
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Maithan Alloys Limited 75
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
3. Receiving of servicesDetail of receiving of services from Key Management Personnel and their relatives which are material (more than 10%of total receiving of services from the related parties)
Name of the Party 2009-10 2008-09 2009-10 2008-09
Directors' remuneration 27,000 17,629 6,219 – Executive's salary and others 4,800 4,800 – –
Transaction value Outstanding balance
4. Rent receivedDetail of rent received from Fellow/Associate which are material (more than 10% of total rent received from therelated parties)
Rs. (in '000)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 60 60 15 –
Transaction value Outstanding balance
Rs. (in '000)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 9,811 – 8,830 –
Transaction value Outstanding balance
Rs. (in '000)
5. Rent paidDetail of rent paid to Fellow/Associate which are material (more than 10% of total rent paid to the related parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Meghalaya Carbide & Chemicals (P) Ltd. Fellow 180 – – – Maithan Smelters Ltd. Associate 60 12 – –
Transaction value Outstanding balance
Rs. (in '000)
6. Interest paidDetail of interest paid to Fellow/Associate which are material (more than 10% of total interest paid to the relatedparties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Anjaney Ferro Alloys Ltd. Associate 2206 – – –
Transaction value Outstanding balance
Rs. (in '000)
7. Commission ReceivedDetail of commission received from Fellow/Associate which are material (more than 10% of total commission receivedfrom the related parties)
Name of the Party Relation 2009-10 2008-09 2009-10 2008-09
Maithan Smelters Ltd. Associate 100,000 – 100,000 –
Transaction value Outstanding balance
Rs. (in '000)
8. Loans ReceivedDetail of loan received from Fellow/Associate which are material (more than 10% of total loan received from therelated parties)
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Annual Report 2009-1076
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
As per our report of even date
For D. K. Chhajer & Co. B. K. AgarwallaChartered Accountants Chairman
Niraj K. Jhunjhunwala S. C. Agarwalla Partner Managing DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
11 Basic and Diluted Earnings Per Share:
12 Previous year figures have been regrouped and rearranged wherever found necessary.
As at As at31 March 2010 31 March 2009
a) Number of Equity Shares at the beginning of the year 9,703,850 9,703,850 b) Number of Equity Shares at the end of the year 9,703,850 9,703,850 c) Weighted Average number of Equity Shares outstanding during the year 9,703,850 9,703,850 d) Face Value of each Equity Share (Rs.) 10.00 10.00 e) Profit after Tax available for Equity Shareholders (Rs.) 301,538,291 57,655 f) Basic Earning Per Share (Rs.) 31.07 0.01 g) Diluted Earnings per Share (Rs.) 31.07 0.01
10. 10% Cumulative Non-Convertible Redeemable Preference Shares have been redeemed as per the terms on 15 July 2008 at 50%Premium.
Schedule 22 CONSOLIDATED ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Section 212
77Maithan Alloys Limited
Statement regarding Subsidiary Companies Pursuant to Section 212 of Companies Act, 1956
1. Name of the Subsidiary Company AXL Exploration (P) Ltd. Anjaney Alloys Limited Anjaney Minerals Limited
2. The Financial Year of the Subsidiary Year ended on Year ended on Year ended on
Company. 31 March 2010 31 March 2010 31 March 2010
3. Holding Company’s interest Entire Subscribed Entire Subscribed 7,99,995 Equity Shares of
Capital comprising of Capital comprising of Rs.10/- each out of the
23,500 Equity Shares 10,00,000 Equity Shares Subscribed and paid up
of Rs.100/- each. of Rs.10/- each. Capital of 10,00,000 Equity
Shares of Rs.10/- each.
4 Extent of holding 100% 100% 79.9995%
5 Net Profit/ (Loss) of the subsidiary (Rs. 5,70,502/-) (2,65,660/-) (27,333/-)
6 For the financial year of the Subsidiary
A] Profits/(Losses) so far as it
concerns the members of
the holding company and
not dealt with in the holding
company’s accounts. (Rs. 5,70,502/-) (2,65,660/-) (21,866/-)
B] Profits/(Losses) so far as it
concerns the members of
the holding company and
dealt with in the holding
company’s accounts. Nil Nil Nil
7 For previous financial years since
it become a subsidiary.
A] Profits/(Losses) so far as it
concerns the members of
the holding company and
not dealt with in the holding
company’s accounts. (Rs. 76,22,664/-) Nil Nil
B] Profits/(Losses) so far as it
concerns the members of
the holding company and
dealt with in the holding
company’s accounts. Nil Nil Nil
B. K. AgarwallaChairman
S. C. Agarwalla Managing Director
Place: Kalyaneshwari Rajesh K. ShahDate : 21 June 2010 Company Secretary
Directors’ Report
78 Annual Report 2009-10
Your Directors have pleasure in submitting the 10th AnnualReport together with the Audited Statement of Account of theCompany for the year ended 31 March 2010.
Financial Results(Rs. in lacs)
Year ended Year ended31.03.2010 31.03.2009
Net Sales NIL NILProfit/(Loss) before Depreciation (7.82) (3.55)Depreciation 0.83 1.15Profit/(Loss) before Tax (8.64) (4.70)Provision for Taxation (incd. Deff. Tax) (2.94) (1.60)Add: Balance brought from Last Year (76.23) (73.07)Balance Carried Forward (81.93) (76.23)
Operation The Company has made an application to the GovernmentAuthorities for renewal of its mining lease and necessaryapproval thereon is awaited. Company has not undertakenactivity pending renewal of mining lease.
DividendYour Directors do not recommend any Dividend for the year2009-10.
DirectorsShri S C Agarwalla, Director of the Company, will retire byrotation from the Board of Directors of the Company at theensuing Annual General Meeting and being eligible offerhimself for reappointment.
Public DepositThe Company has not accepted any deposit during the year2009-10, within the meaning of Section 58A of the CompaniesAct, 1956.
Compliance CertificateIn accordance with Section 383A of the Companies Act, 1956and Companies (Compliance Certificate) Rules, 2001, theCompany has obtained a certificate from a Secretary in wholetime practice confirming that the Company has complied withall the provisions of the Companies Act, 1956 and a copy ofsuch certificate is annexed to this report.
Auditors’ ReportThe observation made in the Auditors’ Report are self-explanatory and therefore, do not call for any furthercomments under Section 217(3) of the Companies Act, 1956.
AuditorsM/s. D K Chhajer & Co., Chartered Accountants, the auditors ofthe Company will retire at the conclusion of the ensuringAnnual General Meeting and being eligible, offer themselves
for re-appointment.
Personnel There are no employees who have received remuneration ofRs.24,00,000/- or more per annum (if employed throughoutthe year) or Rs.2,00,000/- per month (if employed for part ofthe year).
Conservation of Energy & Technology Absorption & ForeignExchange Earnings & OutgoA statement containing the necessary information as required,pursuant to Section 217 (1)(e) of the Companies Act, 1956,read with the Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988 is annexed hereto.
Directors’ Responsibility Statement Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956 with respect to Directors’ ResponsibilityStatement, it is hereby confirmed:
i) that in the preparation of the annual accounts for thefinancial year ended 31 March 2010, the applicableaccounting standards had been followed along with properexplanation relating to material departures;
ii) that the directors had selected such accounting policies andapplied them consistently and made judgments andestimates that were reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company atthe end of the financial year and of the loss of the Companyfor the year under review;
iii) that the directors had taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
iv) that the directors had prepared the accounts for thefinancial year ended 31 March 2010 on a `going concern’basis.
Acknowledgment Your Directors wish to place on record their deep sense ofappreciation for the assistance and co-operation received fromall statutory bodies, banks and employees, during the yearunder review.
On behalf of the Board of Directors
Vishal Agarwalla S. C. AgarwallaDirector Director
Place : KalyaneshwariDate : 15 June 2010
ToThe Shareholders ofAXL Exploration Private Limited.
AXL Exploration Private Limited 79
Annexure to Directors’ Report
Information as per Section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988and forming part of the Directors’ Report for the year ended 31 March 2010.
I. Conservation of Energy Conservation of energy measures taken, additional investments and proposals (if any), impact of such measures, investmentsand proposals and total energy consumption and energy consumption per unit of production: During the year company hasnot consumed any Power and Fuel for its activities. Company’s operations are not energy intensive.
II. Technology Absorption a) Efforts made in technology absorption are given below:
FORM B : FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
A. Research and Development (R & D):1. Specific areas in which R & D carried out by the Company : None2. Benefits derived as a result of the above R & D : Not applicable3. Future plan of action : None at present4. Expenditure on R&D : NIL
B. Technology Absorption, Adaptation and Innovation :Efforts, in brief, made towards technology, absorption, adaptation and innovation, Benefits derived, Technology imported:The Company has not imported any Technology at present therefore we have nothing to report at present.
III. Foreign Exchange Earning and Outgo:
b) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products andservices and export plans: None at present
c) Total foreign exchange used and earned: NIL (P.Y. NIL)
On behalf of the Board of Directors
Place : Kalyaneshwari Vishal Agarwalla S. C. Agarwalla Date : 15 June 2010 Director Director
Annual Report 2009-1080
Registration No: 15 - 05643
The MembersAXL Exploration Private LimitedHIG - 17, BDA Colony, Jaidev Vihar,Bhubaneswar – 751 013
Dear Members,
We have examined the registers, records, books and papers ofAXL Exploration Private Limited (The Company) as required tobe maintained under the Companies Act, 1956 (the Act) andthe rules made there under and also the provisions containedin the Memorandum and Articles of Association of theCompany for the financial year ended on 31 March 2010(financial year). In our opinion and to the best of ourinformation and according to the examination carried out by usand explanations furnished to us by the Company, its officersand agents, we certify that in respect of the aforesaid financialyear:
1. The Company has kept and maintained all registers asstated in Annexure `A’ to this certificate, as per theprovisions of the Act and the rules made there under andall entries therein have been duly recorded.
2. The Company has duly filed the Forms/Returns as stated inAnnexure `B’ to this certificate, with the Ministry ofCorporate Affairs within the time prescribed under the Actor with the additional fee if filed beyond the prescribedtime and the rules made thereunder.
3. The Company being a private limited company has theminimum prescribed paid-up capital and its maximumnumber of members during the said financial year was 2excluding its present and past employees and the Companyduring the year under scrutiny.
i) has not invited public to subscribe for its shares ordebentures; and
ii) has not invited or accepted any deposits from personsother than its members, directors or their relatives.
4. The Board of Directors duly met respectively on02.06.2009, 30.07.2009, 26.10.2009 and 29.01.2010 inrespect of which meetings proper notices were given andthe proceedings were properly recorded and signed in theMinutes Book maintained for the purpose.
5. The Company was not required to close its Register ofMembers or Debenture holders during the financial year.
6. Annual General Meeting for the financial year ended on31.03.2009 has been held on 24.07.2009 after giving duenotice to the members of the Company and the resolutionspassed there at was duly recorded in the Minutes Bookmaintained for the purpose.
7. No extra ordinary general meeting was held during thefinancial year.
8. The Company, being a private limited company, theprovisions of section 295 of the Act are not applicable.
9. The Company has not entered into any contracts fallingwithin the purview of section 297 of the Act.
10. The Company was not required to make any entry in theregister maintained under section 301 of the Act.
11. As there were no instances falling within the purview ofsection 314 of the Act, the Company has not obtained anyapprovals from the Board of directors, members or CentralGovernment.
12. The Company has not issued any duplicate share certificateduring the financial year.
13. i) There was no allotment / transfer or transmission ofsecurities, during the financial year.
ii) The Company has not deposited any amount in aseparate Bank Account as no dividend was declaredduring the financial year.
iii) The Company was not required to post warrants to anymember of the Company as no dividend was declaredduring the financial year.
iv) The Company was not required to transfer any amountto Investor Education and Protection Fund as there wasno unpaid dividend, matured deposits, debentures oraccrued interest thereon, application money due forrefund which have remained unpaid or unclaimed forseven years or more,
v) The Company has duly complied with the requirementsof section 217 of the Act.
14. The Board of Directors of the Company is duly constitutedand there was no appointment of additional director,alternate director and director to fill casual vacancy duringthe financial year.
15. The Company, being a private limited company, theprovisions of section 269 is not applicable.
16. The Company has not appointed any sole selling agentsduring the financial year.
17. The Company was not required to obtain any approvals ofthe Central Government / Company Law Board / Regional
Compliance Certificate
AXL Exploration Private Limited 81
Director / Registrar and/or such authorities prescribed underthe various provisions of the Act during the financial year aswe were explained.
18. The directors have disclosed their interest in otherfirms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made there under.
19. The Company has not issued any share / debenture or othersecurities during the financial year.
20. The Company has not bought back any shares during thefinancial year.
21. There was no redemption of preference shares ordebentures during the financial Year.
22. There was no transaction necessitating the Company tokeep in abeyance the rights to dividend, right shares andbonus shares pending registration of transfer of shares.
23. The Company has not invited/accepted any depositsincluding any unsecured loans falling within the purview ofsection 58A and 58AA read with companies (Acceptance ofDeposit) rules 1975, during the financial year.
24. The Company, being a private limited company, theprovisions of section 293 (1) (d) of the Act are notapplicable.
25. The Company, being a private limited company, theprovisions of section 372 A of the Act are not applicable.
26. The Company has not altered the provisions of theMemorandum with respect to situation of the Company’s
registered office from one State to another during the yearunder scrutiny.
27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the year under scrutiny.
28. The Company has not altered the provisions of theMemorandum with respect to name of the Companyduring the year under scrutiny.
29. The Company has not altered the provisions of theMemorandum with respect to share capital of theCompany during the year under scrutiny.
30. The Company has not altered its Articles of Associationduring the financial year.
31. There was no prosecution initiated against or show causenotices received by the Company and no fines or penaltiesor any other punishment was imposed on the Companyduring the financial year, for offences under the Act as wewere explained.
32. The Company has not received any money as security fromits employees during the financial year.
33. The Company has not constituted a separate providentfund trust for its employees or class of its employees ascontemplated under the section 418 of the Act,
Place: Kolkata (Sandip Kumar Kejriwal)Date: 15 June 2010 C P No. 3821
Annexure ARegisters as maintained by the CompanyRegister of Member U/S 150
Register & Return U/S 163
Minutes Book
Books of Accounts U/S 209
Register of Directors U/S 303
Register of Directors’ Shareholding U/S 307
Register of Share Transfer 108.
Register of Charges U/S 143
Register of Contract U/S 301 read with 299
Annexure B
Forms/Returns filed by the Company
1) Form 20B alongwith Annual Return (U\S 159) for the AGM held on 24.07.2009 has been filed on 08.09.2009
2) Form 23AC & 23ACA alongwith sets of Balance Sheet (U\S 220) as on 31.03.2009 has been filed on 21.08.2009
3) Form 66 alongwith Compliance Certificate (U\S 383A) for the financial year ended on 31.03.2009 has been filed on 17.08.2009
Auditors’ Report
82 Annual Report 2009-10
ToThe Members of AXL EXPLORATION PRIVATE LIMITED
1. We have audited the attached Balance Sheet of AXLEXPLORATION PRIVATE LIMITED as at 31 March 2010 andalso the Profit & Loss Account and the Cash Flow Statementfor the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.
2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles usedand significant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.
3. As required by the Companies (Auditor’s Report) Order,2003 (As amended) issued by the Central Government ofIndia in terms of Sub-Section (4A) of Section 227 of theCompanies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5of the said Order.
Further to our comments in the Annexure referred to inparagraph (3) above, we report that:a. We have obtained all the information and explanations,
which, to the best of our knowledge and belief, werenecessary for the purpose of our audit.
b. In our opinion, proper books of account as required bylaw have been kept by the Company so far as it appearsfrom our examination of such books.
c. The Balance Sheet, the Profit & Loss Account and the
Cash Flow Statement referred to in this report are inagreement with the books of account of the Company.
d. In our opinion, the Balance Sheet, the Profit & LossAccount and the Cash Flow Statement dealt with by thisreport have been prepared in compliance with theaccounting standards referred to in Sub-section (3C) ofSection 211 of the Act, to the extent applicable.
e. On the basis of written representation received from thedirectors, and taken on record by the Board ofDirectors, in our opinion, none of the directors isdisqualified as on 31 March 2010 from beingappointed as director under Section 274(1)(g) of theCompanies Act, 1956.
f. In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts read together with the notes thereon, give theinformation required by the Companies Act, 1956, inthe manner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India;
i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at 31 March 2010;
ii) in the Case of the Profit & Loss account, of the lossfor the year ended on that date and
iii) in the case of the Cash Flow Statement, of the cashflows for the year ended on that date.
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. JhunjhunwalaPlace: Kalyaneshwari PartnerDated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Annexure to the Auditor’s ReportReferred to in paragraph (3) of our report of even date to themembers of AXL EXPLORATION PRIVATE LIMITED.
i) a) The Company has maintained proper records showingfull particulars including quantitative details andsituation of its Fixed Assets.
b) These Fixed assets were physically verified by themanagement during the year. We have been informed
that no material discrepancies were noticed on suchphysical verification.
c) No fixed assets have been disposed off during theyear.
ii) a) The management has conducted physical verificationof inventory at reasonable intervals during the year.
b) The procedure of physical verification of inventory
83AXL Exploration Private Limited
followed by the management is reasonable andadequate in relation to the size of the Company andthe nature of its business.
c) The Company is maintaining proper records ofinventory and no material discrepancies were noticedon physical verification.
iii) The Company has neither granted nor taken any loans,secured or unsecured, to/ from companies, firms or otherparties covered in the register maintained under Section301 of the Companies Act, 1956. Consequently, clauses(iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of the Order are notapplicable.
iv) In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of theCompany and the nature of its business, for the purchaseof fixed assets and for the sale of goods. During thecourse of our audit, no major weakness has been noticedin the internal controls in respect of these areas.
v) a) According to the information and explanations givento us, we are of the opinion that the particulars ofcontracts or arrangements referred to in section 301of the Act that need to be entered into the registermaintained under Section 301 have been so entered.
b) In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of such contracts or arrangements havebeen made at prices which are reasonable havingregard to the prevailing market prices at the relevanttime where such market prices are available.
vi) The Company has not accepted any deposits from thepublic during the year.
vii) The Company is not required to have an internal auditsystem during the year under review.
viii) The Central Government has not prescribed themaintenance of cost records by the Company undersection 209(1)(d) of the Companies Act, 1956.
ix) a) According to the information and explanations givento us, there are no statutory dues in respect ofprovident fund, employees’ state insurance, incometax, sales tax, wealth tax, service-tax, customs duty,excise duty, cess and others outstanding as at 31March 2010 for a period of more than six monthsfrom the date they became payable.
b) According to the information and explanations givento us, there are no disputed statutory dues remainingoutstanding as at the year end.
x) The Company’s accumulated losses at the end of the
financial year are more than fifty percent of its net worth.The Company has incurred cash loss in current year and inthe immediately preceding financial year.
xi) The Company has not obtained any loan/money from abank or financial institution or debenture holders andhence the provisions of clause 4(xi) of the order are notapplicable to the Company.
xii) The Company has not granted any loans and advances onthe basis of security by way of pledge of shares,debentures and other securities.
xiii) The Company is not a chit fund, nidhi or mutual benefitfund/society. Therefore, the provisions of clause (xiii) ofthe order are not applicable to the Company.
xiv) The Company is not dealing or trading in shares,securities, debentures & other investments. Therefore, theprovisions of clause (xiv) of the order are not applicable tothe Company.
xv) The Company has not given any guarantee for loans takenby others from Bank or Financial Institutions.
xvi) The Company has not obtained any term loan during theyear under review.
xvii) According to the information and explanations given tous and on the basis of the overall examination of thebalance sheet of the Company, we report that no fundsraised on short term basis have been used for long terminvestment.
xviii) According to the information and explanations given tous, the Company has not made any allotment of sharesduring the year and hence this clause is not applicable.
xix) The Company has not issued any secured debenturesduring the year and hence the provisions of clause 4(xix)of the order are not applicable to the Company.
xx) During the year covered by our Audit report, the Companyhas not raised any money by public issues.
xxi) During the checks carried out by us, any fraud on or bythe Company has not been noticed or reported during theyear under report.
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. JhunjhunwalaPlace: Kalyaneshwari PartnerDated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Annual Report 2009-1084
Balance Sheet As at 31 March 2010
The Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Vishal AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule As at As at
31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders' Fund
Share Capital 1 2,350,000 2,350,000
Reserves & Surplus 2 11,050,000 11,050,000
13,400,000 13,400,000
APPLICATION OF FUNDS
Fixed Assets 3
Gross Block 3,476,936 3,476,936
Less : Depreciation 1,227,792 1,145,241
Net Block 2,249,144 2,331,695
Current Assets, Loans & Advances
Inventories 4 2,448,491 2,448,491
Cash and Bank Balances 5 347,036 429,048
Loans & Advances 6 199,480 194,649
2,995,007 3,072,188
Less : Current Liabilities & Provisions 7 4,242,557 3,538,022
Net Current Assets (1,247,550) (465,834)
Deferred Tax Assets (Net) 8 4,205,240 3,911,475
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Profit & Loss Account 8,193,166 7,622,664
13,400,000 13,400,000
Significant Accounting Policies & Notes on Accounts 10
AXL Exploration Private Limited 85
Profit and Loss Account For the year ended 31 March 2010
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Vishal AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule Year ended Year ended
31 March 2010 31 March 2009
INCOME – –
– –
EXPENDITURE
Administrative & Other Expenses 9 781,715 355,133
Depreciation 82,551 114,596
864,266 469,729
Profit/(loss) Before Taxation (864,266) (469,729)
Provision for Taxation:
- Current Tax – –
- Deferred Tax (293,764) (159,661)
- Fringe Benefit Tax – 4,020
Profit/(loss) after Taxation (570,502) (314,088)
Add/(Less) : Taxation for earlier year – (1,282)
Add: Balance Brought forward from previous year (7,622,664) (7,307,294)
Balance carried to Balance Sheet (8,193,166) (7,622,664)
Earning Per Share (Basic & Diluted) Rs. (24.28) (13.37)
Significant Accounting Policies & Notes on Accounts 10
Annual Report 2009-1086
Cash Flow Statement For the year ended 31 March 2010
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170
Firm Reg. No. 304138E
Place: Kalyaneshwari Vishal AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Year ended Year ended
31 March 2010 31 March 2009
A. CASH FLOW FROM OPERATING ACTIVITIES
Net profit before tax and extraordinary items (864,266) (469,729)
Adjusted for :
Add : Depreciation 82,551 114,596
Operating profit before working capital changes (781,715) (355,133)
Adjusted for :
Trade and other receivables (4,832) –
Trade and other payables 704,535 561,050
Cash generated from operations (82,012) 205,917
Direct Taxes Received/(Paid) – (3,554)
Net cash from operating activities (A) (82,012) 202,363
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets – –
Net cash used in investing activities (B) – –
Net increase/(decrease) in cash and cash equivalent (A+B) (82,012) 202,363
Cash and cash equivalents at the beginning of the year 429,048 226,685
Cash and cash equivalents at the end of the year 347,036 429,048
AXL Exploration Private Limited 87
Schedules to the Balance Sheet As at 31 March 2010
Securities Premium A/cAs per last A/c 11,050,000 11,050,000
11,050,000 11,050,000
A) Authorised Capital 30,000 (30,000) Equity Shares of Rs.100/- each 3,000,000 3,000,000
3,000,000 3,000,000 B) Issued, Subscribed & Paid up
23,500 (23,500) Equity Shares of Rs.100/- each, fully paid-up 2,350,000 2,350,000 2,350,000 2,350,000
As at As at31 March 2010 31 March 2009
(Amount in Rs.)
Cash in hand (as certified by the Management) 126,429 248,394 Balance with Scheduled Banks- In Current Accounts 220,607 180,654
347,036 429,048
(Advances Recoverable in Cash or in kind or for value to be received) Advances 174,480 169,649 Security Deposits 25,000 25,000
199,480 194,649
As on Addition/ As on Up to For the Up to As on As on01.04.2009 (Adjustment) 31.03.2010 01.04.2009 Year 31.03.2010 31.03.2010 31.03.2009
during theyear
1 Land 2,021,201 – 2,021,201 – – – 2,021,201 2,021,2012 Magazine 11,836 – 11,836 2,967 443 3,410 8,426 8,8693 Vehicle 507,132 – 507,132 395,126 28,998 424,124 83,008 112,0064 Dumper 891,267 – 891,267 725,114 49,846 774,960 116,307 166,1535 Office Equipment 45,500 – 45,500 22,034 3,264 25,298 20,202 23,466
Total 3,476,936 – 3,476,936 1,145,241 82,551 1,227,792 2,249,144 2,331,695Previous Year 3,476,936 – 3,476,936 1,030,645 114,596 1,145,241 2,331,695
Sl. No. PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
Schedule 1 SHARE CAPITAL
(As Certified by Management)Manganese Ores 2,448,491 2,448,491
2,448,491 2,448,491
As at As at31 March 2010 31 March 2009
Schedule 4 INVENTORIES
Schedule 2 RESERVES & SURPLUS
Schedule 3 FIXED ASSETS
Schedule 5 CASH & BANK BALANCES
Schedule 6 LOANS & ADVANCES
Annual Report 2009-1088
Schedules to the Balance Sheet As at 31 March 2010
Deferred Tax Assets:On account of Depreciation 87,025 87,643 On account of Unabsorbed Business Loss 4,118,215 3,823,832
4,205,240 3,911,475
Current Account with Holding Company 3,994,768 3,514,412 Other Liabilities 247,789 20,052 Provision for Taxation – 3,558
4,242,557 3,538,022
As at As at31 March 2010 31 March 2009
(Amount in Rs.)
Schedules to the Profit and Loss AccountFor the year ended 31 March 2010
Salary 220,837 208,127 Employer’s Contribution to Provident & Other Funds 26,576 25,950 Rent 24,000 18,000 Travelling & Conveyance 12,853 10,788 Bank Charges 403 1,998 Auditor’s Remuneration:
For Audit Fees 13,236 13,483 Pollution control Expenses 75,000 – Vehicle Maintenance 20,208 22,807 Miscellaneous Expenses 15,736 11,587 Filing Fees 1,390 1,900 Professional Charges 371,476 40,110 Interest – 383
781,715 355,133
Year ended Year ended31 March 2010 31 March 2009
(Amount in Rs.)
Schedule 7 CURRENT LIABILITIES & PROVISIONS
Schedule 9 ADMINISTRATIVE, SELLING & OTHER EXPENSES
Schedule 8 DEFERRED TAX ASSETS (NET)
AXL Exploration Private Limited 89
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
1) Significant Accounting Policies i) Basis of Accounting
The financial statements have been prepared tocomply, in all material respects, with accountingstandards as notified by Companies AccountingStandards Rules, 2006 and the relevant provisions ofthe Companies Act, 1956.
The financial statements have been prepared underhistorical cost convention on an accrual basis. Theaccounting policies have been consistently followed bythe Company and are consistent with those used in theprevious year except where otherwise stated.
ii) Fixed AssetsFixed Assets are stated at cost less accumulateddepreciation.
iii) InventoriesInventories have been valued at Cost or Net RealisableValue whichever is lower.
iv) Depreciation Depreciation on Fixed Assets is provided on Writtendown Value method in the manner and at the ratesspecified in Schedule XIV to the Companies Act, 1956.
v) TaxationCurrent tax is determined as the amount of tax payablein respect of taxable income for the period based onapplicable tax rate and laws as per the provisions of theIncome Tax Act, 1961.
vi) Revenue RecognitionRevenue is recognised to the extent that it is probablethat the economic benefits will flow to the Companyand the revenue can be easily measured.
vii) ProvisionsA provision is recognised when there is a presentobligation as a result of past event and it is probablethat an outflow of resources will be required to settlethe obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to itspresent value and are determined based on bestestimate required to settle the obligation at the balancesheet date. These are reviewed at each balance sheetdate and adjusted to reflect the current best estimates
viii)Earnings Per Share (Basic & Diluted)Basic earnings (loss) per share is calculated by dividingthe net profit or loss for the year attributable to equity
shareholders by the weighted average number ofequity shares outstanding during the year.
For the purpose of calculating diluted earnings pershare, the net profit or loss for the period attributableto equity shareholders and the weighted averagenumber of shares outstanding during the period areadjusted for the effects of all dilutive potential equityshares.
ix) Cash Flow StatementCash Flow is reported using the indirect method,whereby profit before tax is adjusted for the effects oftransactions of non cash nature, any deferrals oraccruals of past or future cash receipts or payments.
2. Related Party Disclosures pursuant to AccountingStandard 18 issued by ICAI:
Related Parties:A. Controlling Companies : NILB. Holding Company : Maithan Alloys Ltd.C. Key Management : Shri Subhas Chandra
Personnel AgarwallaShri Vishal Agarwalla
Details of Transactions with related parties during theperiod under audit are as follows:
(Rs. in ’000)
Nature of Transactions Holding
Current Account with holding company 3995(3514)
3. Previous year’s figures have been regrouped or rearrangedwherever considered necessary.
4. Figures have been rounded off to the nearest rupee.
For D K Chhajer & Co. S. C. AgarwallaChartered Accountants Director
Niraj K. Jhunjhunwala Vishal AgarwallaPartner DirectorM.No. F-057170Firm Reg. No. 304138E
Place: KalyaneshwariDate: 15 June 2010
Schedule 10 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS
Balance Sheet Abstract
90 Annual Report 2009-10
Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.
Balance Sheet Abstract and Company’s General Business Profile:
Public Issue
Bonus Issue
3 1 0 3
Registration No.
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (Amount in Rs. Thousands)
Total Liabilities
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
2 0 1 0
Date Month Year
Private Placement
Paid-up Capital
Sources of Funds
Total Assets
Reserves & Surplus
IV. Performance of Company (Amount in Rs. Thousands)
Item Code No. (ITC Code)
V. Generic Names of three Principal Products/Services of Company (as per monetary terms)
Net Fixed Assets Investments
Turnover & Other Incomes
Profit before Tax
Total Expenditure
Application of Funds
1 3 4 0 0
9 8 0 1 0 0 XProduct Description Mining Project
U14292OR1999PTC005643
2 3 5 0
N I L
(8 6 4)
8 6 4
Earning per Share (in Rs.) Dividend Rate(2 4 . 2 8) N I L
2 2 4 9 N I L
Net Current Assets (1 2 4 7) Misc. Expenditure N I L
Accumulated Losses 8 1 9 3 Deferred Tax Assets 4 2 0 5
N I L
Rights Issue N I L
State Code 1 5
N I L
N I L
1 3 4 0 0
1 1 0 5 0
Secured Loans Unsecured LoansN I L N I L
Profit after Tax (5 7 1)
Directors’ Report
91Anjaney Alloys Limited
Your Directors have pleasure in presenting Second AnnualReport on the business and operations of the Companytogether with the Audited Accounts for the year ended 31March 2010.
Operations Your Company in in the process of setting up its Ferro Alloymanufacturing unit in the State of Andhra Pradesh nearVisakhapatnam. The Company has already acquired the Landfor the project. Construction is going on in full swing at theProject Site. The Company has placed orders for procurementof Plant and Machinery. The negotiations are in advance stagewith various banks for financing the project.
Capital The Company has increased its Authorised Share Capital formRs.2,00,00,000/- (Rupees Two Crores only) to Rs.25,00,00,000/-(Rupees Twenty Five Crores only). Further the Companyproposes to increase its paid-up share capital with a view toaugment the Long term financial resources, in near future.
DividendSince the Company is in the process of setting up itsmanufacturing plant, your Directors do not recommend anydividend.
DirectorsShri S C Agarwalla, Director of the Company, will retire byrotation from the Board of Directors of the Company at the2nd Annual General Meeting and being eligible offer himselffor reappointment.
Public DepositThe Company has not accepted any deposit during the year2009-10, within the meaning of Section 58A of the CompaniesAct, 1956.
Compliance CertificateIn accordance with Section 383A of the Companies Act, 1956and Companies (Compliance Certificate) Rules, 2001, theCompany has obtained a certificate from a Secretary in wholetime practice confirming that the Company has complied withall the provisions of the Companies Act, 1956 and a copy ofsuch certificate is annexed to this report.
Auditors’ Report The Report of the Auditors read together with the Notes onaccounts are self explanatory and do not call for any furthercomments under Section 217 of the Companies Act, 1956.
AuditorsM/s. D K Chhajer & Co., Chartered Accountants, the auditors ofthe Company will retire at the conclusion of the ensuringAnnual General Meeting and being eligible, offer themselves
for re-appointment.
PersonnelThere are no employees who have received remuneration ofRs.24,00,000.00 or more per annum (if employed throughoutthe year) or Rs.2,00,000.00 per month (if employed for part ofthe year).
Conservation of Energy & Technology Absorption & ForeignExchange Earnings & OutgoA statement containing the necessary information as required,pursuant to Section 217 (1)(e) of the Companies Act, 1956,read with the Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988 is annexed hereto.
Directors’ Responsibility StatementPursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956 with respect to Directors’ ResponsibilityStatement, it is hereby confirmed:
i) that in the preparation of the accounts for the periodended 31 March 2010, the applicable accountingstandards had been followed along with properexplanation relating to material departures;
ii) that the directors had selected such accounting policies andapplied them consistently and made judgments andestimates that were reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company atthe end of the accounting period and of the loss of theCompany for the accounting period under review;
iii) that the directors had taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
iv) that the directors had prepared the accounts for theaccounting period ended 31 March, 2010 on a goingconcern’ basis.
Acknowledgment Your Directors wish to place on record their deep sense ofappreciation for the assistance and co-operation received fromall statutory bodies, banks and employees, during the yearunder review.
On behalf of the Board of Directors
B. K. Agarwalla S. C. AgarwallaDirector Director
Place : KalyaneshwariDate : 15 June 2010
ToThe Shareholders ofANJANEY ALLOYS LIMITED.
Annexure to Directors’ Report
92 Annual Report 2009-10
Information as per Section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988and forming part of the Directors’ Report for the year ended 31 March 2010.
I. Conservation of Energy a) Conservation of energy measures taken, additional investments and proposals (if any), impact of such measures,
investments and proposals and total energy consumption and energy consumption per unit of production: There was noconsumption of Energy, Power and Fuel during the year ended 31 March 2010, since the Company is in process of settingup its plant.
II. Technology Absorption a) Efforts made in technology absorption is given below:
FORM B : FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
A. Research and Development (R & D):1. Specific areas in which R & D carried out by the Company : None2. Benefits derived as a result of the above R & D : Not applicable3. Future plan of action : None4. Expenditure on R&D : Nil
B. Technology Absorption, Adaptation and Innovation :Efforts, in brief, made towards technology, absorption, adaptation and innovation, Benefits derived, Technology imported:Company has not imported any Technology at present therefore we have nothing to report at present.
III. Foreign Exchange Earning and Outgo:a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and
services and export plans: None at present
b) Total foreign exchange used and earned: NIL
On behalf of the Board of Directors
Place : Kalyaneshwari B. K. Agarwalla S. C. AgarwallaDate : 15 June 2010 Director Director
Compliance Certificate
93Anjaney Alloys Limited
Regn. No.: 21-129049
The MembersAnjaney Alloys Limited3F, East India House, 20, British Indian Street,Kolkata - 700 069
Dear Members,
We have examined the registers, records, books and papers ofAnjaney Alloys Limited (the Company) as required to bemaintained under the Companies Act, 1956 (the Act) and therules made thereunder and also the provisions contained in theMemorandum and Articles of Association of the Company forthe financial year ended on 31 March 2010 (financial year.). Inour opinion and to the best of our information and accordingto the examination carried out by us and explanationsfurnished to us by the Company, its officers and agents, wecertify that in respect of the aforesaid financial year:
1. The Company has kept and maintained all registers asstated in Annexure `A’ to this certificate, as per theprovisions of the Act and the rules made thereunder and allentries therein have been duly recorded.
2. The Company has duly filed the forms and returns as statedin Annexure ‘B’ to this certificate with the Ministry ofCorporate Affairs within the time prescribed under the Actor with the additional fee if filed beyond the prescribedtime and the rules made there under.
3. The Company, being a limited company, comments are notrequired.
4. The Board of Directors duly met respectively on02.06.2009, 27.08.2009, 06.10.2009 and 29.01.2010 inrespect of which meetings proper notices were given andthe proceedings were properly recorded and signed in theMinutes Book maintained for the purpose.
5. The Company has not closed its Register of Members orDebenture holder during the financial year.
6. Annual General Meeting for the financial year ended on31.03.2009 has been held on 25.07.2009 after giving duenotice to the members of the Company and the resolutionspassed there at was duly recorded in the Minutes Bookmaintained for the purpose.
7. One Extra Ordinary General Meetings were held during thefinancial year, after giving due notice to the members ofthe Company and the resolutions passed there at was dulyrecorded in the Minutes Book maintained for the purpose.
8. The Company has not advanced any loans to its directors orpersons or firms or companies referred to under section295 of the Act.
9. The Company has not entered into any contracts falling
within the purview of section 297 of the Act.
10. The Company was not required to make any entry in theregister maintained U/S 301 of the Act.
11. As there were no instances falling within the purview ofsection 314 of the Act, the Company has not obtained anyapprovals from the Board of Directors, Members or CentralGovernment.
12. The Company has not issued any duplicate share certificateduring the financial year.
13. i) There was no allotment / transfer or transmission ofsecurities, during the financial year.
ii) The Company was not required to deposit the dividendmoney in separate bank account as no dividend wasdeclared during the financial year.
iii) The Company was not required to post warrants to anymember of the Company as no dividend was declaredduring the financial year.
iv) The Company was not required to transfer any amountto Investor Education and Protection Fund as there wasno unpaid dividend, matured deposits, debentures oraccrued interest thereon, application money due forrefund which have remained unpaid or unclaimed forseven years or more.
v) The Company has duly complied with the requirementsof section 217 of the Act.
14. The Board of Directors of the Company is duly constitutedand there is no appointment of additional director,alternate director and director to fill casual vacancy duringthe financial year.
15. The Company has not appointed any Managing Director /Whole Time Director/ Manager during the financial year.
16. The Company has not appointed any sole selling agentsduring the financial year.
17. The Company was not required to obtain any approvals ofthe Central Government / Company Law Board / RegionalDirector / Registrar and/or such authorities prescribed underthe various provisions of the Act during the financial year aswe were explained.
18. The directors have disclosed their interest in otherfirms/companies to the Board of Directors pursuant to the
94 Annual Report 2009-10
provisions of the Act and the rules made thereunder.
19. The Company has not issued any share / debenture or othersecurities during the financial year.
20. The Company has not bought back any shares during thefinancial year.
21. There was no redemption of preference shares ordebentures during financial year.
22. There were no transactions necessitating the Company tokeep in abeyance the rights to dividend, right shares andbonus shares pending registration of transfer of shares.
23. The Company has not invited/accepted any deposits withinthe provisions of sec. 58A and 58AA read with Companies(Acceptance of Deposits) Rules, 1975.
24. The amount borrowed by the Company from directors /members / public / financial institutions / bank and othersduring the financial year is within the borrowing limits ofthe Company and that necessary resolutions as per section293(1) (d) of the Act have been passed in duly convenedExtra Ordinary General Meeting dated 14.01.2009.
25. The Company has not made loans / advances or givenguarantees or provided securities to other bodies corporateand consequently no entries have been made in the registerkept for the purpose.
26. The Company has not altered the provisions of theMemorandum with respect to situation of the Company’sregistered office from one State to another during the year
under scrutiny.
27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the year under scrutiny.
28. The Company has not altered the provisions of theMemorandum with respect to name of the Companyduring the year under scrutiny.
29. The Company has altered the provisions of theMemorandum with respect to share capital of theCompany during the year under scrutiny.
30. The Company has not altered its Articles of Associationduring the financial year.
31. There was no prosecution initiated against or show causenotices received by the Company and no fines or penaltiesor any other punishment was imposed on the Companyduring the financial year, for offences under the Act as wewere explained.
32. The Company has not received any money as security fromits employees during the financial year.
33. The Company has not constituted a separate providentfund trust for its employees or class of its employees ascontemplated under the section 418 of the Act.
Place: Kolkata Sandip Kumar KejriwalDate: 15 June 2010 C P No. 3821
Annexure ARegisters as maintained by the Company1. Register of Member U/S 150
2. Index of members U/S 151
3. Register & Return U/S 163
4. Minutes Book U/S 193
5. Books of Accounts U/S 209
6. Register of Directors U/S 303
7. Register of Directors’ Shareholding U/S 307
8. Register of Shares Transfer U/S 108
9. Register of Contracts under Sec. 301 read with Sec. 299
10. Register of Charges U/S 143
11. Register of Fixed Assets
Annexure BForms/Returns filed by the Company1) Form 20B alongwith Annual Return (U\S 159) for the AGM
held on 25.07.2009 has been filed on 08.09.2009
2) Form 23AC & 23ACA alongwith sets of Balance Sheet (U\S220) as on 31.03.2009 has been filed on 21.08.2009
3) Form 66 alongwith Compliance Certificate (U\S 383A) forthe financial year ended on 31.03.2009 has been filed on17.08.2009
4) Form 17 (U/S 138) dated 02.06.2009 has been filed on27.08.2009
5) Form 8 (U/S 125/127) dated 14.01.2009 has been filed on17.04.2009
6) Form 23 (U/S 192) dated 23.02.2010 has been filed on17.03.2010
7) Form 5 (U/S 94 (1) (a)) dated 23.02.2010 has been filed on16.03.2010
Auditors’ Report
95Anjaney Alloys Limited
ToThe Members of ANJANEY ALLOYS LIMITED
1. We have audited the attached Balance Sheet of ANJANEY
ALLOYS LIMITED as at 31 March 2010 and also the Profit
and Loss Account and the Cash Flow Statement for the year
ended on that date annexed thereto. These financial
statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor’s Report) Order,
2003 (As amended) issued by the Central Government of
India in terms of Sub-Section (4A) of Section 227 of the
Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5
of the said Order.
Further to our comments in the Annexure referred to in
paragraph (3) above, we report that:
a. We have obtained all the information and explanations,
which, to the best of our knowledge and belief, were
necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears
from our examination of such books.
c. The Balance Sheet, the Profit & Loss Account and the
Cash Flow Statement referred to in this report is in
agreement with the books of account of the Company.
d. In our opinion, the Balance Sheet, the Profit & Loss
Account and the Cash Flow Statement dealt with by this
report have been prepared in compliance with the
accounting standards referred to in Sub-section (3C) of
Section 211 of the Act, to the extent applicable.
e. On the basis of written representation received from the
directors, and taken on record by the Board of
Directors, in our opinion, none of the directors is
disqualified as on 31 March 2010 from being
appointed as director under section 274(1)(g) of the
Companies Act, 1956.
f. In our opinion and to the best of our information and
according to the explanations given to us, the said
accounts read together with the notes thereon, give the
information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in
conformity with the accounting principles generally
accepted in India;
i) in the case of the Balance Sheet, of the state of
affairs of the Company as at 31 March 2010;
ii) in the case of the Profit & Loss account, of the loss
for the year ended on that date; and
iii) in the case of the Cash Flow statement, of the cash
flows for the year ended on that date.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Annexure to the Auditor’s Report
96 Annual Report 2009-10
Referred to in paragraph (3) of our report of even date to the
members of ANJANEY ALLOYS LIMITED.
i) a) The Company has maintained proper records
showing full particulars including quantitative details
and situation of its Fixed Assets.
b) These Fixed assets were physically verified by the
management during the year. We have been
informed that no material discrepancies were
noticed on such physical verification.
c) No fixed assets have been disposed off during the
period. However, out of 60.15 acres of Lease hold
land, Company has surrendered 20.15 acres of land
to Andhra Pradesh Industrial Infrastructure
Corporation Limited, and received back the amount
paid for the same.
ii) There being no inventory in the Company, this clause is
not applicable.
iii) The Company has neither granted nor taken any loans,
secured or unsecured, to/ from companies, firms or other
parties covered in the register maintained under Section
301 of the Companies Act, 1956. Consequently, clauses
(iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of the Order are not
applicable.
iv) In our opinion and according to the information and
explanations given to us, there are adequate internal
control procedures commensurate with the size of the
Company and the nature of its business, for the purchase
of fixed assets and for the sale of goods. During the
course of our audit, no major weakness has been noticed
in the internal controls in respect of these areas.
v) a) According to the information and explanations given
to us, we are of the opinion that the particulars of
contracts or arrangements referred to in Section 301
of the Act that need to be entered into the register
maintained under Section 301 have been so entered.
b) In our opinion and according to the information and
explanations given to us, the transactions made in
pursuance of such contracts or arrangements have
been made at prices which are reasonable having
regard to the prevailing market prices at the relevant
time where such market prices are available.
vi) The Company has not accepted any deposits from the
public during the year.
vii) The Company is not required to have an internal audit
system during the year under review.
viii) The Central Government has not prescribed the
maintenance of cost records by the Company under
section 209(1)(d) of the Companies Act, 1956.
ix) (a) According to the information and explanations given
to us, there are no statutory dues in respect of
provident fund, employees’ state insurance, income
tax, sales tax, wealth tax, service-tax, customs duty,
excise duty, cess and others outstanding as at 31
March 2010 for a period of more than six months
from the date they became payable.
b) According to the information and explanations given
to us, there are no disputed statutory dues
remaining outstanding as at the end of the period.
x) The Company does have accumulated losses at the end of
the financial year. The Company has incurred cash loss in
current period.
97Anjaney Alloys Limited
xi) The Company has not obtained any loan/money from a
bank or financial institution or debenture holders and
hence the provisions of clause 4(xi) of the order are not
applicable to the Company.
xii) The Company has not granted any loans and advances on
the basis of security by way of pledge of shares,
debentures and other securities.
xiii) The Company is not a chit fund, nidhi or mutual benefit
fund/society. Therefore, the provisions of clause (xiii) of
the order are not applicable to the Company.
xiv) The Company is not dealing or trading in shares,
securities, debentures & other investments. Therefore, the
provisions of clause (xiv) of the order are not applicable to
the Company.
xv) According to the information and explanations given to
us the Company has not given any guarantee for loans
taken by others from Banks or Financial Institutions.
xvi) The Company has not taken any term loan during the year
under review.
xvii) According to the information and explanations given to
us and on the basis of the overall examination of the
balance sheet of the Company, we report that no funds
raised on short term basis have been used for long term
investment.
xviii) According to the information and explanations given to
us, the Company has not made allotment of shares during
the year to parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any secured debentures
during the year and hence the provisions of Clause 4(xix)
of the order are not applicable to the Company.
xx) During the period covered by our Audit report, the
Company has not raised any money by public issues.
xxi) During the checks carried out by us, any fraud on or by
the Company has not been noticed or reported during the
period under report.
For D. K. Chhajer & Co.
Firm Registration No. 304138E
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Balance Sheet As at 31 March 2010
98 Annual Report 2009-10
The Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala B. K. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari S. C. AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule As at As at
31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders' Fund
Share Capital 1 10,000,000 10,000,000
Share Application Money 205,000,000 190,000,000
Loan Funds
Unsecured Loans 2 86,695,169 45,317,835
301,695,169 245,317,835
APPLICATION OF FUNDS:
Fixed Assets 3
Gross Block 164,761,242 240,611,000
Less: Depreciation 110,772 –
Net Block 164,650,470 240,611,000
Capital Work-in-Progress 4 54,596,963 2,578,791
219,247,433 243,189,791
Current Assets, Loans & Advances
Cash & Bank Balances 5 40,135,321 500,841
Loans & Advances 6 42,931,809 1,581,571
83,067,130 2,082,412
Less: Current Liabilities & Provisions 7 2,219,285 179,268
Net Current Assets 80,847,845 1,903,144
Deferred Tax Assets (Net) 4,311 –
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preliminary Expenses 179,920 224,900
Deferred Revenue Expenses 1,150,000 –
Profit & Loss Account 265,660 –
301,695,169 245,317,835
Significant Accounting Policies & Notes on Accounts 9
Profit and Loss Account For the year ended 31 March 2010
99Anjaney Alloys Limited
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala B. K. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari S. C. AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule Year ended
31 March 2010
INCOME
Interest (Gross)
(TDS: Rs.102,690) 758,525
758,525
EXPENDITURE
Administrative & Other Expenses 8 872,744
Depreciation 110,772
Preliminary Expenses written off 44,980
1,028,496
Profit/ (Loss) Before Taxation (269,971)
Less: Provision For Taxation:
- Current Tax –
- Deferred Tax (4,311)
Profit / (Loss) After Taxation (265,660)
Add: Balance Brought Forward from previous year –
Balance Carried to Balance Sheet (265,660)
Earning per Share (Basic & Diluted) (0.27)
Significant Accounting Policies & Notes on Accounts 9
Cash Flow Statement For the year ended 31 March 2010
100 Annual Report 2009-10
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala B. K. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari S. C. AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Year ended Year ended
31 March 2010 31 March 2009
A. CASH FLOW FROM OPERATING ACTIVITIES
Net profit before tax and extraordinary items (269,971) –
Adjustments for :
Add : Depreciation 110,772 –
Deferred Revenue Expenses (1,150,000) –
Preliminary Expenses written off 44,980 –
Operating profit before working capital changes (1,264,219) –
Adjustment for :
Trade and other receivables (41,350,238) (1,581,571)
Trade and other payables 2,040,017 179,268
Cash generated from operations (40,574,440) (1,402,303)
Net cash from operating activities (A) (40,574,440) (1,402,303)
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed Assets (4,298,149) (240,611,000)
Preliminary Expenses – (224,900)
Surrender of Leasehold Fixed Assets 80,147,907 –
Pre-operative Expenses (52,018,172) (2,578,791)
Net cash from investing activities (B) 23,831,586 (243,414,691)
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds/(Repayment)from/of borrowings 41,377,334 45,317,835
Issue of Share Capital – 10,000,000
Share Application Money 15,000,000 190,000,000
Net cash from financing activities (C) 56,377,334 245,317,835
Net increase/(decrease) in cash and cash equivalents (A+B+C) 39,634,480 500,841
Cash and cash equivalents at the beginning of the year 500,841 –
Cash and cash equivalents at the end of the year 40,135,321 500,841
Schedules to the Balance Sheet As at 31 March 2010
101Anjaney Alloys Limited
From Body Corporates 86,695,169 45,317,835 86,695,169 45,317,835
Authorised Capital:2,50,00,000 (20,00,000) Equity Shares of Rs. 10/ each 250,000,000 20,000,000
250,000,000 20,000,000Issued, Subscribed & Paid-up Capital10,00,000 (10,00,000) Equity Shares of Rs. 10/- each fully paid-up in cash 10,000,000 10,000,000
10,000,000 10,000,000
As at As at31 March 2010 31 March 2009
(Amount in Rs.)
Building 17,814,534 – Plant & Machinery 21,807,853 – Pre-Operative ExpensesAt the beginning of the year 2,578,791 – Add: Transfer during the year 12,395,785 2,578,791
14,974,576 2,578,791 54,596,963 2,578,791
As at As at31 March 2010 31 March 2009
As at Addition Sales / As at Depreciation As at As at01.04.2009 Transfer 31.03.2010 for the Year 31.03.2010 31.03.2009
Lease hold Land 240,611,000 – 80,147,907 160,463,093 – 160,463,093 240,611,000 Plant & Machinery – 1,547,284 – 1,547,284 17,534 1,529,750 – Vehicle – 1,684,601 – 1,684,601 61,358 1,623,243 – Furniture & Fixture – 643,914 – 643,914 14,789 629,125 – Office Equipment – 147,700 – 147,700 2,950 144,750 – Computer – 274,650 – 274,650 14,141 260,509 –
240,611,000 4,298,149 80,147,907 164,761,242 110,772 164,650,470 240,611,000 Previous Year – 240,611,000 – 240,611,000 – 240,611,000
PARTICULARS GROSS BLOCK NET BLOCK
Cash-in-Hand (as certified by the management) 244,063 51,686 Balance with Scheduled Banks:
In Current Account 39,891,258 449,155 40,135,321 500,841
Schedule 1 SHARE CAPITAL
Schedule 4 CAPITAL WORK-IN-PROGRESS
Schedule 2 UNSECURED LOAN
Schedule 3 FIXED ASSETS
Schedule 5 CASH AND BANK BALANCES
Schedules to the Balance Sheet As at 31 March 2010
102 Annual Report 2009-10
Creditors for Capital Goods 1,160,408 – Creditors for Expenses 273,451 12,499 Other Liabilities 785,426 166,769
2,219,285 179,268
(Unsecured, Considered Good) Advances (recoverable in cash or in kind or value to be received) 41,456,419 962,500 Security Deposits 1,372,700 – TDS Receivable 102,690 – Prepaid Lease Rent – 619,071
42,931,809 1,581,571
As at As at31 March 2010 31 March 2009
(Amount in Rs.)
Schedules to the Profit and Loss AccountFor the year ended 31 March 2010
Salary & Wages 822,353 Staff Welfare 46,067 Stores Consumed 1,636,921 Repairs to Others 6,789 Professional Charges 979,103 Transportation Charges 375,507 Interest 6,793,427 Audit Fees 13,236 Bank Charges 25,430 Lease rent 619,071 Rent 367,127 Vehicle Running Expenses 99,495 Miscellaneous Expenses 1,484,003
13,268,529 Less: Amount Transferred to Capital Work in Progress (Expenses related to project under construction) 12,395,785
872,744
Year ended31 March 2010
(Amount in Rs.)
Schedule 6 LOANS & ADVANCES
Schedule 8 ADMINISTRATIVE & OTHER EXPENSES
Schedule 7 CURRENT LIABILITIES & PROVISIONS
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
103Anjaney Alloys Limited
1) Significant Accounting Policies i) Basis of Accounting
The financial statements have been prepared tocomply, in all material respects, with accountingstandards as notified by Companies AccountingStandards Rules, 2006 and the relevant provisions ofthe Companies Act, 1956.
The financial statements have been prepared underhistorical cost convention on an accrual basis. Theaccounting policies have been consistently followed bythe Company and are consistent with those used in theprevious year except where otherwise stated.
ii) Fixed AssetsFixed Assets are stated at cost less accumulateddepreciation.
iii) Capital work-in-progressPre-operative expenses shall be apportioned to fixedassets at the time of capitalisation.
iv) Depreciation Depreciation on Fixed Assets is provided on StraightLine method in the manner and at the rates specifiedin Schedule XIV to the Companies Act, 1956.
v) Preliminary ExpensesPreliminary Expenses will be written-off over a periodof 5 years.
vi) TaxationCurrent tax is determined as the amount of tax payablein respect of taxable income for the period based onapplicable tax rate and laws as per the provisions ofthe Income Tax Act, 1961.
Deferred tax assets and liability is calculated byapplying the tax act and tax laws that have beenenacted or substantially enacted by the balance sheetdate. Deferred tax assets are recognised and carriedforward only to the extent that there is a reasonablecertainty that sufficient future taxable income will beavailable against which such deferred tax assets can berealised.
vii) Revenue RecognitionRevenue is recognised to the extent that it is probablethat the economic benefits will flow to the Companyand the revenue can be easily measured.
viii) ProvisionsA provision is recognised when there is a present
obligation as a result of past event and it is probablethat an outflow of resources will be required to settlethe obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to itspresent value and are determined based on bestestimate required to settle the obligation at thebalance sheet date. These are reviewed at each balancesheet date and adjusted to reflect the current bestestimates
xi) Earnings Per Share (Basic & Diluted)Basic earnings (loss) per share are calculated bydividing the net profit or loss for the year attributableto equity shareholders by the weighted averagenumber of equity shares outstanding during the year.
x) Cash Flow StatementCash Flow is reported using the indirect method,whereby profit before tax is adjusted for the effects oftransactions of none cash nature, any deferrals oraccruals of past or future cash receipts or payments.
2) Pre-Operative ExpensesPre-Operative expenses have been shown under capitalwork in progress, pending allocation to fixed assets andshall be apportioned proportionally at the time ofcapitalisation to be considered after the start of commercialoperation.
Details of Pre-operative Expenses included in Capital workin progress are as under:
Particulars 31.03.2010 31.03.2009Salaries & Wages 822,353 –Stores Consumed 1,636,921 – Staff Welfare 46,067 – Generator Running Expenses 207,114 – Electricity Charges 177,423 – Transportation Charges 375,507 –Rent 619,071 1,251,929 Professional & Consultancy Charges 979,103 353,000 Security Expenses 167,830 – Interest 6,793,427 410,959 Travelling & Conveyance Expenses 134,889 155,146 Vehicle Running Expenses 99,495 Audit Fees – 12,000 Bank Charges – 20,661 Miscellaneous Expenses 336,585 375,096
12,395,785 2,578,791
Schedule 9 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
104 Annual Report 2009-10
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala B. K. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari S. C. AgarwallaDate : 15 June 2010 Director
3) Miscellaneous Expenses Comprises of the following :
Particulars Amount (Rs.)
Telephone Expenses 39,080General Expenses 108,004Testing Charges 144,650Office Maintenance Charges 19,600 Hiring Charges 191,934Advertisement 21,585Rates & Taxes 14,750Books & Periodical 3,926Joining Expenses 49,445Postage & Courier 8,424Security Expenses 167,830Travelling & Conveyance Expenses 143,392Filing Fee 3,240Printing & Stationery 41,439Stipend 142,207 Generator Running Expenses 207,114Electricity Charges 177,423
1,484,043 Less: Sundry balances written back (40.00)
1,484,003
4) Related Party Disclosures pursuant to AccountingStandard 18 issued by ICAI:Related Parties:A. Controlling Companies
NIL
B. Holding CompanyMaithan Alloys Ltd.
C. Associate CompanyMeghalaya Carbide & Chemicals (P) LtdMaithan Smelters Ltd
D. Key Management PersonnelShri Basant Kumar AgarwallaShri Subhas Chandra AgarwallaShri Vishal AgarwallaShri Sudhanshu Agarwalla
Details of Transactions with related parties during theperiod under audit are as follows:
(Rs. in '000)
Nature of Transaction Holding AssociateCompany Companies
2009-10 2008-09 2009-10 2008-09
Investment – 10,000 – –Share Application Received (Refunded)a) Maithan Alloys Ltd (190,000) 190,000 – –b) Maithan Smelters Ltd – – 20,000 –c) Meghalaya Carbide &
Chemicals (P) Ltd – – 185,000 –Purchase 563 – – –
5) The entire Paid-up capital of Rs.1,00,00,000 divided into10,00,000 equity shares of Rs. 10/- each fully paid-up isheld by the Holding Company viz Maithan Alloys Limited.
6) Previous year figures have not been given for the profit andLoss account as the same has not been drawn in theprevious year.
7) Previous year’s figures have been re-grouped/ re-arrangedwherever found necessary.
8) Figures have been rounded off to the nearest rupee.
Schedule 9 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS (Contd...)
Balance Sheet Abstract
105Anjaney Alloys Limited
Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.
Balance Sheet Abstract and Company’s General Business Profile:
Public Issue
Bonus Issue
3 1 0 3
Registration No.
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (Amount in Rs. Thousands)
Total Liabilities
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
2 0 1 0
Date Month Year
Private Placement
Paid-up Capital
Sources of Funds
Total Assets
Share Application money
IV. Performance of Company (Amount in Rs. Thousands)
Item Code No. (ITC Code)
V. Generic Names of three Principal Products/Services of Company (as per monetary terms)
Net Fixed Assets Investments
Turnover & Other Incomes
Profit before Tax
Total Expenditure
Application of Funds
3 0 1 6 9 5
7 2 0 2 3 0 0 0Product Description Ferro- Silico – Manganese
Item Code No. (ITC Code) 7 2 0 2 1 1 0 0Product Description Ferro- Manganese containing by weight more than 2% of Carbon
U27106WB2008PLC129049
1 0 0 0 0
7 5 9
(2 7 0)
1 0 2 8
Earning per Share (in Rs.) Dividend Rate(0 . 2 7) N I L
2 1 9 2 4 7 N I L
Net Current Assets 8 0 8 4 8 Misc. Expenditure 1 3 3 0
Accumulated Losses 2 6 6 Deferred Tax Assets 4
N I L
Rights Issue N I L
State Code 2 1
N I L
N I L
3 0 1 6 9 5
2 0 5 0 0 0
Reserves & Surplus Secured LoansN I L
Unsecured Loans 8 6 6 9 5
N I L
Profit after Tax (2 6 6)
Directors’ Report
106 Annual Report 2009-10
Your Directors have pleasure in presenting Second AnnualReport on the business and operations of the Companytogether with the Audited Accounts for the year ended 31March 2010.
Operations Your Company is exploring various opportunities for acquiringmines. The negotiations are in process with various StateGovernments, agents and/or brokers for acquiring mines inIndia.
DividendYour Directors do not recommend any dividend.
DirectorsShri Aditya Agarwalla, Director of the Company will retire byrotation from the Board of Directors of the Company at the2nd Annual General Meeting and being eligible offer himselffor reappointment.
Public DepositThe Company has not accepted any deposit during the year2009-10, within the meaning of Section 58A of the CompaniesAct, 1956.
Compliance CertificateIn accordance with Section 383A of the Companies Act, 1956and Companies (Compliance Certificate) Rules, 2001, theCompany has obtained a certificate from a Secretary in wholetime practice confirming that the Company has complied withall the provisions of the Companies Act, 1956 and a copy ofsuch certificate is annexed to this report.
Auditors’ Report The Report of the Auditors read together with the Notes onaccounts are self explanatory and do not call for any furthercomments under Section 217 of the Companies Act, 1956.
AuditorsM/s. D K Chhajer & Co., Chartered Accountants, the auditors ofthe Company will retire at the conclusion of the ensuringAnnual General Meeting and being eligible, offer themselvesfor re-appointment.
PersonnelThere are no employees who have received remuneration ofRs.24,00,000.00 or more per annum (if employed throughoutthe year) or Rs.2,00,000.00 per month (if employed for part ofthe year).
Conservation of Energy & Technology Absorption & ForeignExchange Earnings & OutgoA statement containing the necessary information as required,pursuant to Section 217 (1)(e) of the Companies Act, 1956,read with the Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988 is annexed hereto.
Directors’ Responsibility StatementPursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956 with respect to Directors’ ResponsibilityStatement, it is hereby confirmed:
i) that in the preparation of the accounts for the periodended 31 March 2010, the applicable accountingstandards had been followed along with properexplanation relating to material departures;
ii) that the directors had selected such accounting policies andapplied them consistently and made judgments andestimates that were reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company atthe end of the accounting period and of the loss of theCompany for the accounting period under review;
iii) that the directors had taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
iv) that the directors had prepared the accounts for theaccounting period ended 31 March 2010 on a `goingconcern’ basis.
Acknowledgment Your Directors wish to place on record their deep sense ofappreciation for the assistance and co-operation received fromall statutory bodies, banks and employees, during the yearunder review.
On behalf of the Board of Directors
S.C. Agarwalla Sudhanshu AgarwallaDirector Director
Place : KalyaneshwariDate : 15 June 2010
ToThe Shareholders ofANJANEY MINERALS LIMITED.
Annexure to Directors’ Report
107Anjaney Minerals Limited.
Information as per Section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988and forming part of the Directors’ Report for the year ended 31 March 2010.
I. Conservation of Energy Conservation of energy measures taken, additional investments and proposals (if any), impact of such measures, investmentsand proposals and total energy consumption and energy consumption per unit of production: During the year Company hasnot consume any power and Fuel for its actives. Company’s operations are not energy intensive.
II. Technology Absorption a) Efforts made in technology absorption are given below:
FORM B : FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
A. Research and Development (R & D):1. Specific areas in which R & D carried out by the Company : None2. Benefits derived as a result of the above R & D : Not Applicable3. Future plan of action : None at present4. Expenditure on R&D : Nil
B. Technology Absorption, Adaptation and Innovation :Efforts, in brief, made towards technology, absorption, adaptation and innovation, Benefits derived, Technology imported:Company has not imported any Technology at present therefore we have nothing to report at present.
III. Foreign Exchange Earning and Outgo:a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and
services and export plans: None at present
b) Total foreign exchange used and earned: NIL
On behalf of the Board of Directors
Place : Kalyaneshwari S. C. Agarwalla Sudhanshu AgarwallaDate : 15 June 2010 Director Director
Compliance Certificate
108 Annual Report 2009-10
Regn. No.: 21-130114
The MembersAnjaney Minerals Limited3F, East India House, 20, British Indian Street,Kolkata - 700 069
Dear Members,
We have examined the registers, records, books and papers ofAnjaney Minerals Limited (the Company) as required to bemaintained under the Companies Act, 1956 (the Act) and therules made thereunder and also the provisions contained in theMemorandum and Articles of Association of the Company Forthe year ended on 31.03.2010 (Financial Year). In our opinionand to the best of our information and according to theexamination carried out by us and explanations furnished to usby the Company, its officers and agents, we certify that inrespect of the aforesaid financial year:
1. The Company has kept and maintained all registers asstated in Annexure `A’ to this certificate, as per theprovisions of the Act and the rules made thereunder and allentries therein have been duly recorded.
2. The Company has duly filed the forms and returns as statedin Annexure ‘B’ to this certificate with the Ministry ofCorporate Affairs within the time prescribed under the Actor with the additional fee if filed beyond the prescribedtime and the rules made there under.
3. The Company, being a limited Company, comments are notrequired.
4. The Board of Directors duly met respectively on02.06.2009, 30.07.2009, 26.10.2009 and 29.01.2010 inrespect of which meetings proper notices were given andthe proceedings were properly recorded and signed in theMinutes Book maintained for the purpose.
5. The Company has not closed its Register of Members orDebenture holder during the financial year.
6. Annual General Meeting for the financial year ended on31.03.2009 has been held on 25.07.2009 after giving duenotice to the members of the Company and the resolutionspassed there at was duly recorded in the Minutes Bookmaintained for the purpose.
7. No Extra Ordinary General Meeting was held during thefinancial year,
8. The Company has not advanced any loans to its directors orpersons or firms or companies referred to under section295 of the Act.
9. The Company has not entered into any contracts falling
within the purview of section 297 of the Act.
10. The Company was not required to make any entry in theregister maintained U/S 301 of the Act.
11. As there were no instances falling within the purview ofsection 314 of the Act, the Company has not obtained anyapprovals from the Board of directors, members or CentralGovernment.
12. The Company has not issued any duplicate share certificateduring the financial year.
13. i) There was no allotment / transfer or transmission ofsecurities, during the financial year.
ii) The Company was not required to deposit the dividendmoney in separate bank account as no dividend wasdeclared during the financial year.
iii) The Company was not required to post warrants to anymember of the Company as no dividend was declaredduring the financial year.
iv) The Company was not required to transfer any amountto Investor Education and Protection Fund as there wasno unpaid dividend, matured deposits, debentures oraccrued interest thereon, application money due forrefund which have remained unpaid or unclaimed forseven years or more.
v) The Company has duly complied with the requirementsof section 217 of the Act.
14. The Board of Directors of the Company is duly constitutedand there is no appointment of additional director,alternate director and director to fill casual vacancy duringthe financial year.
15. The Company has not appointed any Managing Director /Whole Time Director/ Manager during the financial year.
16. The Company has not appointed any sole selling agentsduring the financial year.
17. The Company was not required to obtain any approvals ofthe Central Government / Company Law Board / RegionalDirector / Registrar and/or such authorities prescribed underthe various provisions of the Act during the financial year aswe were explained.
109Anjaney Minerals Limited.
18. The directors have disclosed their interest in otherfirms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made thereunder.
19. The Company has not issued any share / debenture or othersecurities during the financial year.
20. The Company has not bought back any shares during thefinancial year.
21. There was no redemption of preference shares ordebentures during financial year.
22. There were no transactions necessitating the Company tokeep in abeyance the rights to dividend, right shares andbonus shares pending registration of transfer of shares.
23. The Company has not invited/accepted any deposits withinthe provisions of sec. 58A and 58AA read with Companies(Acceptance of Deposits) Rules, 1975.
24. The Company has not made any borrowing during thefinancial year
25. The Company has not made any loans / advances or givenguarantees or provided securities to other bodies corporateand consequently no entries have been made in the registerkept for the purpose.
26. The Company has not altered the provisions of theMemorandum with respect to situation of the Company’sregistered office from one State to another during the yearunder scrutiny.
27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the year under scrutiny.
28. The Company has not altered the provisions of theMemorandum with respect to name of the Companyduring the year under scrutiny.
29. The Company has not altered the provisions of theMemorandum with respect to share capital of theCompany during the year under scrutiny.
30. The Company has not altered its Articles of Associationduring the financial year.
31. There was no prosecution initiated against or show causenotices received by the Company and no fines or penaltiesor any other punishment was imposed on the Companyduring the financial year, for offences under the Act as wewere explained.
32. The Company has not received any money as security fromits employees during the financial year.
33. The Company has not constituted a separate providentfund trust for its employees or class of its employees ascontemplated under the section 418 of the Act.
Place: Kolkata Sandip Kumar KejriwalDate: 15 June 2010 C P No. 3821
Annexure ARegisters as maintained by the Company1. Register of Member U/S 1502. Index of members U/S 151 3. Register & Return U/S 1634. Minutes Book U/S 1935. Books of Accounts U/S 2096. Register of Directors U/S 3037. Register of Directors’ Shareholding U/S 3078. Register of Shares Transfer U/S 1089. Register of Contracts under Sec. 301 read with Sec. 29910. Register of Charges U/S 14311. Register of Fixed Assets
Annexure BForms/Returns filed by the Company1) Form 20B alongwith Annual Return (U\S 159) for the AGM held on 25.07.2009 has been filed on 08.09.2009
2) Form 23AC & 23ACA alongwith sets of Balance Sheet (U\S 220) as on 31.03.2009 has been filed on 21.08.2009
3) Form 66 alongwith Compliance Certificate (U\S 383A) for the financial year ended on 31.03.2009 has been filed on 17.08.2009
Auditors’ Report
110 Annual Report 2009-10
ToThe Members of ANJANEY MINERALS LIMITED
1. We have audited the attached Balance Sheet of ANJANEYMINERALS LIMITED as at 31 March 2010 and also the Profitand Loss Account and the Cash Flow Statement for the yearended on that date annexed thereto. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.
2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles usedand significant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.
3. As required by the Companies (Auditor’s Report) Order,2003 (As amended) issued by the Central Government ofIndia in terms of Sub-Section (4A) of Section 227 of theCompanies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5of the said Order.
Further to our comments in the Annexure referred to inparagraph (3) above, we report that:
a. We have obtained all the information and explanations,which, to the best of our knowledge and belief, werenecessary for the purpose of our audit.
b. In our opinion, proper books of account as required bylaw have been kept by the Company so far as it appearsfrom our examination of such books.
c. The Balance Sheet, the Profit & Loss Account and the
Cash Flow Statement referred to in this report are inagreement with the books of account of the Company.
d. In our opinion, the Balance Sheet, the Profit & LossAccount and the Cash Flow Statement dealt with bythis report have been prepared in compliance with theaccounting standards referred to in Sub-section (3C) ofSection 211 of the Act, to the extent applicable.
e. On the basis of written representation received from thedirectors, and taken on record by the Board ofDirectors, in our opinion, none of the directors isdisqualified as on 31 March 2010 from beingappointed as director under section 274(1)(g) of theCompanies Act, 1956.
f. In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts read together with the notes thereon, give theinformation required by the Companies Act, 1956, inthe manner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India;
i) in the case of the the Balance Sheet, of the state ofaffairs of the Company as at 31 March 2010;
ii) in the case of the Profit & Loss account, of the lossfor the year ended on that date; and
iii) in the case of the Cash Flow statement, of the cashflows for the year ended on that date.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Annexure to the Auditor’s Report
111Anjaney Minerals Limited.
Referred to in paragraph (3) of our report of even date to the
members of ANJANEY MINERALS LIMITED.
i) The Company has neither granted nor taken any loans,
secured or unsecured, to/ from companies, firms or other
parties covered in the register maintained under Section
301 of the Companies Act, 1956. Consequently, clauses
(iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of the Order are not
applicable.
2) In our opinion and according to the information and
explanations given to us, there are adequate internal
control procedures commensurate with the size of the
Company and the nature of its business, for the purchase
of fixed assets and for the sale of goods. During the
course of our audit, no major weakness has been noticed
in the internal controls in respect of these areas.
3) a) According to the information and explanations given
to us, we are of the opinion that the particulars of
contracts or arrangements referred to in section 301
of the Act that need to be entered into the register
maintained under Section 301 have been so entered.
b) In our opinion and according to the information and
explanations given to us, the transactions made in
pursuance of such contracts or arrangements have
been made at prices which are reasonable having
regard to the prevailing market prices at the relevant
time where such market prices are available.
4) The Company has not accepted any deposits from the
public during the period.
5) The Company has incurred cash loss in the current period.
6) The Company has not obtained any loan/money from a
bank or financial institution or debenture holders and
hence the provisions of clause 4(xi) of the order are not
applicable to the Company.
7) The Company has not granted any loans and advances on
the basis of security by way of pledge of shares,
debentures and other securities.
8) The Company has not given any guarantee for loans taken
by others from Bank or Financial Institutions.
9) The Company has not obtained any term loan during the
period under review.
10) During the period covered by our Audit report, the
Company has not raised any money by public issues.
11) During the checks carried out by us, any fraud on or by
the Company has not been noticed or reported during the
period under report.
12) The other Clauses (i), (ii), (vii) to (x), (xii), (xiv), (xix), (xx) of
paragraph 4 of the aforesaid Order are not presently
applicable to the Company for the current year.
For D. K. Chhajer & Co.
Chartered Accountants
Niraj K. Jhunjhunwala
Place: Kalyaneshwari Partner
Dated: 15 June 2010 M. No- F057170
Firm Reg. No. 304138E
Balance Sheet As at 31 March 2010
112 Annual Report 2009-10
The Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Sudhanshu AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule As at As at
31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders' Fund
Share Capital 1 10,000,000 10,000,000
Share Application Money 22,500,000 24,000,000
Total 32,500,000 34,000,000
APPLICATION OF FUNDS:
Capital Work-in-Progress 2 – 11,678
Current Assets, Loans & Advances
Cash & Bank Balances 3 198,060 1,670,558
Loans & Advances 4 32,109,520 32,107,747
32,307,580 33,778,305
Less: Current Liabilities & Provisions 5 14,633 14,633
Net Current Assets 32,292,947 33,763,672
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preliminary Expenses 179,720 224,650
Profit & Loss Account 27,333 –
Total 32,500,000 34,000,000
Significant Accounting Policies & Notes on Accounts 6
Profit and Loss Account For the year ended 31 March 2010
113Anjaney Minerals Limited.
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Sudhanshu AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Schedule Year ended
31 March 2010
INCOME
Interest on Fixed Deposits (TDS - Rs. 9,520) 46,181
Total 46,181
EXPENDITURE
Audit Fees 13,236
Bank Charges 550
Filling Fees 1,620
Professional Charges 1,500
Preliminary Expenses written off 44,930
Total 61,836
Loss for the year 15,655
Add: Prior Period Item 11,678
Loss carried to Balance Sheet 27,333
Earning Per Share (Basic & Diluted) (0.03)
Significant Accounting Policies & Notes on Accounts 6
Cash Flow Statement For the year ended 31 March 2010
114 Annual Report 2009-10
As per our report of even date
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Sudhanshu AgarwallaDate : 15 June 2010 Director
(Amount in Rs.) Year ended Year ended
31 March 2010 31 March 2009
A. CASH FLOW FROM OPERATING ACTIVITIES
Net profit before tax and extraordinary items (27,333) –
Adjusted for :
Prior Period Item 11,678 –
Preliminary Expenses written off 44,930 –
Operating profit before working capital changes 29,275 –
Adjusted for :
Trade and other receivables (1,773) (32,107,747)
Cash generated from operations 27,502 (32,107,747)
Direct Taxes Received/(Paid) – –
Net cash from operating activities (A) 27,502 (32,107,747)
B. CASH FLOW FROM INVESTING ACTIVITIES:
Preliminary Expenses – (224,650)
Pre-operative Expenses – (11,678)
Net cash from investing activities (B) – (236,328)
C. CASH FLOW FROM FINANCING ACTIVITIES:
Issue of Share Capital – 10,000,000
Share Application Money (1,500,000) 24,000,000
Net cash from financing activities (C) (1,500,000) 34,000,000
Net increase/(decrease) in cash and cash equivalents (A+B+C) (1,472,498) 1,655,925
Cash and cash equivalents at the beginning of the year 1,670,558 –
Cash and cash equivalents at the end of the year 198,060 1,670,558
Schedules to the Balance Sheet As at 31 March 2010
115Anjaney Minerals Limited.
A) Authorised Capital 2,000,000 (2,000,000) Equity Shares of Rs. 10/ each 20,000,000 20,000,000
20,000,000 20,000,000B) Issued, Subscribed & Paid-Up Capital
1,000,000 (1,000,000) Equity Shares of Rs. 10/- each fully paid-up in cash. 10,000,000 10,000,00010,000,000 10,000,000
As at As at31 March 2010 31 March 2009
(Amount in Rs.)
Pre-Operative ExpensesOpening balance 11,678 – Filling Fees – 2,179 General expenses – 1,510 Printing & Stationery – 353 Bank Charges – 750 Provision for Taxation – 2,633 Audit Fees – 12,000
11,678 19,425 Less: Interest on Fixed Deposit – 7,747
11,678 11,678 Less: Transferred to Profit & Loss A/c 11,678 –
– 11,678
Cash-in-Hand (as certified by the management) 107,021 108,641 Balance with Scheduled Banks:
In Current Account 91,039 61,917 In Fixed Deposit Account – 1,500,000
198,060 1,670,558
(Unsecured, Considered Good) Advances (recoverable in cash or in kind or for value to be received) 32,100,000 32,100,000 Accrued Interest on FD – 7,747 TDS Receivable 9,520 –
32,109,520 32,107,747
Current Liabilities Liability for expenses 12,000 12,000 ProvisionsProvision for Tax 2,633 2,633
14,633 14,633
Schedule 1 SHARE CAPITAL
Schedule 2 CAPITAL WORK IN PROGRESS
Schedule 3 CASH AND BANK BALANCES
Schedule 4 LOANS & ADVANCES
Schedule 5 CURRENT LIABILITIES & PROVISIONS
Schedule annexed to and forming part of the AccountsFor the year ended 31 March 2010
116 Annual Report 2009-10
1) Significant Accounting Policies i) Basis of Accounting
The financial statements have been prepared tocomply, in all material respects, with accountingstandards as notified by Companies AccountingStandards Rules, 2006 and the relevant provisions ofthe Companies Act, 1956.
The financial statements have been prepared underhistorical cost convention on accrual basis. Theaccounting policies have been consistently followedby the Company and are consistent with those used inthe previous year except where otherwise stated.
ii) Preliminary ExpensesPreliminary and Share Issue Expenditure is amortisedover a period of five years.
iii) TaxationCurrent tax is determined as the amount of taxpayable in respect of taxable income for the periodbased on applicable tax rate and laws as per theprovisions of the Income Tax Act, 1961.
iv) Revenue RecognitionRevenue is recognised to the extent that it is probablethat the economic benefits will flow to the Companyand the revenue can be easily measured.
v) ProvisionsA provision is recognised when there is a presentobligation as a result of past event and it is probablethat an outflow of resources will be required to settlethe obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to itspresent value and are determined based on bestestimate required to settle the obligation at thebalance sheet date. These are reviewed at eachbalance sheet date and adjusted to reflect the currentbest estimates
vi) Earnings Per Share (Basic & Diluted)Basic earnings (loss) per share is calculated by dividingthe net profit or loss for the year attributable to equity
shareholders by the weighted average number ofequity shares outstanding during the year.
vii) Cash Flow StatementCash Flow is reported using the indirect method,whereby profit before tax is adjusted for the effects oftransactions of none cash nature, any deferrals oraccruals of past or future cash receipts or payments.
2) Out of total paid-up share capital of Rs.1,00,00,000divided into 10,00,000 equity shares of Rs.10 each fullypaid-up, 7,99,995 equity shares of Rs. 10/- each fully paid-up are held by the holding company viz Maithan AlloysLimited.
3) Related Party Disclosures pursuant to AccountingStandard 18 issued by ICAI:Related Parties:A. Controlling Companies : NIL
B. Holding Company : Maithan Alloys Ltd.
C. Associates : Anjaney Ferro Alloys Ltd.
D. Fellow Company : Meghalaya Carbide & Chemicals P Ltd.
E. Key Management : Shri Subhas Chandra Personnel Agarwalla
Shri Aditya Agarwalla
Shri Sudhanshu Agarwalla
Details of Transactions with related parties during theperiod under audit are as follows:
(Rs. in ’000)Nature of Transactions Holding Fellow
Share Application Money (received) – 10000Share Application Money (Refunded) 11500 –
4) Previous year figures have been rearranged and regroupedwherever considered necessary, however in case of profit& loss account previous year figures need not be given asthe same has not been prepared.
5) Figures have been rounded off to the nearest rupee.
For D. K. Chhajer & Co.Chartered Accountants
Niraj K. Jhunjhunwala S. C. Agarwalla Partner DirectorMembership No. F057170Firm Reg. No. 304138E
Place: Kalyaneshwari Sudhanshu AgarwallaDate : 15 June 2010 Director
Schedule 6 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS
Balance Sheet Abstract
117Anjaney Minerals Limited.
Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.
Balance Sheet Abstract and Company’s General Business Profile:
Public Issue
Bonus Issue
3 1 0 3
Registration No.
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (Amount in Rs. Thousands)
Total Liabilities
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
2 0 1 0
Date Month Year
Private Placement
Paid-up Capital
Sources of Funds
Total Assets
Reserves & Surplus
IV. Performance of Company (Amount in Rs. Thousands)
Item Code No. (ITC Code)
V. Generic Names of three Principal Products/Services of Company (as per monetary terms)
Net Fixed Assets Investments
Turnover & Other Incomes
Profit before Tax
Total Expenditure
Application of Funds
3 2 5 0 0
9 8 0 1 0 0 XProduct Description Mining Project
U13100WB2008PLC130114
1 0 0 0 0
4 6
(1 6)
6 2
Earning per Share (in Rs.) Dividend Rate(0 . 0 3) N I L
N I L N I L
Net Current Assets 9 7 9 3 Misc. Expenditure 1 8 0
Accumulated Losses 2 7 Deferred Tax Assets N I L
N I L
Rights Issue N I L
State Code 2 1
N I L
N I L
3 2 5 0 0
N I L
Secured Loans Unsecured LoansN I L N I L
Profit after Tax (1 6)
Notice
118 Annual Report 2009-10
Notice is hereby given that the 25th Annual General Meeting of the Company will be held on Wednesday, the 18 August, 2010at 11:00 a.m. at The Conclave, 216 A J C Bose Road, Kolkata – 700 017 to transact the following business:
Ordinary Business:1. To receive, consider and adopt the Audited Balance Sheet as at 31 March 2010, the Profit & Loss Account for the year endedon that date and the reports of the Board of Directors and Auditors thereon.
2. To declare dividend on equity shares.
3. To appoint a Director in place of Sri Shrigopal Jhunjhunwala, who retires by rotation and being eligible offers himself for re-appointment.
4. To appoint a Director in place of Sri Vikash Kumar Jewrajka, who retires by rotation and being eligible offers himself for re-appointment.
5. To appoint Auditors and to fix their remuneration.
Registered Office : By Order of the Board3F, East India House, For Maithan Alloys Limited20, British Indian Street,Kolkata – 700 069 Rajesh K ShahDate : 21 June 2010 Company Secretary
1. A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint a Proxy to attend and on a poll,vote instead of himself/herself and the Proxy need not be a Member of the Company. The instrument appointing the proxy(ies),in order to be effective, must be deposited at the Registered Office of the Company not less than forty-eight hours before thetime fixed for the commencement of the meeting.
2. The Register of Members and the Share Transfer Books of the Company will remain closed from 14 August 2010 to 18 August2010 (both days inclusive).
3. Members are requested to bring their copy of the Annual Report of the Company at the Meeting. As a measure of economycopies of Annual Report will not be distributed at the venue of the meeting.
4. Members seeking any information or clarification on the accounts are requested to send their queries in writing to theCompany, at least one week before the date of the meeting, to enable us to keep the information(s) ready.
5. The dividend for the year ended 31 March 2010 as recommended by the Board, if approved at the Annual General Meeting,will be paid to those members whose names will appear in the Company’s Register of Members as on 18 August 2010 aftergiving effect to all the valid transfers received upto the close of business hours on 13 August 2010. In respect of shares heldin electronic form, the dividend will be paid on the basis of details of beneficial ownership position provided as at the close ofbusiness hours on 13 August 2010 by National Securities Depository Limited and Central Depository Services (India) Limited.
6. Members holding shares in electronic form may note that bank particulars registered against their respective depositoryaccounts will be used by the Company for payment of dividend. The Company or its Registrars cannot act on any requestreceived directly from the members holding shares in electronic form for any change of bank particulars or bank mandates.Such changes are to be advised only to Depository Participant of the members.
Notes
119Maithan Alloys Limited
7. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank mandateto their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physicalform are requested to advise any change of address immediately to the Company/Registrar and Share Transfer Agent, M/s.Maheshwari Datamatics Pvt. Ltd.
8. Members, holding shares in the same name or in the same order of names but in several folios are requested to consolidatethem into one folio.
9. Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956 the amount of dividend remainingunclaimed and unpaid for a period of seven years from the date lying in the unpaid dividend account, is required to betransferred to the Investor Education and Protection Fund (IEPF). Accordingly, till date the Company has transferred the unpaidand unclaimed amount pertaining to the dividend for the financial year 2001-2002 to the IEPF. Members who have not yeten-cashed their dividend warrants for the financial year 2002-2003 onwards are requested to make their claims to theCompany immediately. Members may please note that no claim shall lie either against the IEPF or the Company in respect ofdividend which remains unclaimed and unpaid for a period of Seven years from the date it is lying in the unpaid dividendaccount and no payment shall be made in respect of such claim.
10. A brief profile of the Directors who are being proposed to be appointed/re-appointed, as required by Clause 49 of the ListingAgreement with the Stock Exchanges, is given below
Name of Director Sri Shrigopal Jhunjhunwala Sri Vikash Kumar Jewrajka
Date of Birth 30 April 1943 12 November 1974
Qualification M.COM, LLB B.Com., FCA
Experience 45 years 11 years
Date of Appointment 17 August 2001 23 July 2008
Nature of expertise in specific Expertise in the field of Iron and Experience in the fieldfunctional areas steel industry of refractory & steel industry.
Name(s) of other companies in which directorships held(as per Section 275 and 278 of the Companies Act, 1956) None None
Number of shares of Rs. 10/- each held by the Director or his relatives 7522 276
Number of ESOPs granted Nil Nil
Relationship between Directorsinterse (as per section 6 read with schedule IA of the Companies Act, 1956) None None
120 Annual Report 2009-10
Chairman & Whole Time Director Sri B. K. Agarwalla
Managing Director Sri S. C. Agarwalla
Wholetime DirectorsSri Subodh Agarwalla
Sri Aditya Agarwalla
Directors Sri Makhan Lal Satnaliwala
Sri Shrigopal Jhunjhunwala
Sri Raj Kumar Agarwal
Sri Nand Kishore Agarwal
Sri Vikash Kumar Jewrajka
Sri Biswajit Choudhuri
Company Secretary Sri Rajesh K. Shah
AuditorsD. K. Chhajer & Co.
Chartered Accountants
Registered office 3F, East India House
20, British Indian Street, Kolkata – 700 069
WorksKalyaneshwari (West Bengal)
Ri-Bhoi (Meghalaya)
Jaisalmer (Rajasthan)
Sangli (Maharashtra)
Banks and financial institutionsState Bank of India
Punjab National Bank
IndusInd Bank
Citibank N.A.
Axis Bank Limited
Corporate information
In our report we have disclosed forward-looking information so that investors can comprehend the
Company’s prospects and make informed investment decisions. This annual report and other written and
oral statements that we make periodically contain such forward-looking statements that set out
anticipated results based on the Management’s plans and assumptions. We have tried, wherever possible,
to qualify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’,
‘plans’, ‘believes’, and words and terms of similar substance in connection with any discussion of future
operating or financial performance.
We do not guarantee that any forward-looking statement will be realised, although we believe we have
been diligent and prudent in our plans and assumptions. The achievement of future results is subject to
risks, uncertainties and validity of inaccurate assumptions. Should known or unknown risks or
uncertainties materialise, or should underlying assumptions prove inaccurate, our actual results could vary
materially from those anticipated, estimated or projected. Investors should bear this in mind as they
consider forward-looking statements. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
Forward-looking statement
Corporate identity 02 Chairman’s overview 04 Managing Director’s review 06 Success
drivers 10 Management discussion and analysis 14 Finance review 17 Risk management 19Directors’ report 20 Report on Corporate Governance 26 Financial section 35 Corporate
information 120
Contents
Maithan Alloys Limited | Annual report, 2009-10
Maithan Alloys LimitedCorporate Office
P.O. Kalyaneshwari 713369, West Bengal, India
Phone: 91-341-2522 994/5 Fax: 91 341 2521 303
Registered Office
3F East India House, 20 British Indian Street
Kolkata 700 069, India
Predictability > Cyclicality
A
Pr
oduc
t |
info
@tr
isys
com
.com